USDA publishes new REAP rule: What does it mean for fisheries?
By Sarah Schumann
October 1, 2026 — Today, the USDA published a new final rule changing the way that the agency administers the Rural Energy for America Program (REAP). REAP is a program that offers grants, loans, and energy audits to help agricultural producers and small businesses install energy efficiency equipment and renewable energy systems. It has been successfully used by fishing businesses (primarily in Alaska) to upgrade the efficiency of non-propulsion systems on their vessels.
Since 2023, fishermen have been collaborating bicoastally through the Fishery Friendly Climate Action Campaign to evaluate and improve the utility of the REAP program for fishing businesses. With renewed vigor in 2026 due to record-high fuel prices, we have been engaging with entities such as the USDA Office of Seafood to explore ways that program could be made more accessible to fishermen. Primary recommendations from the fishing industry have included:
Make all fishermen eligible to receive funding under REAP by including fishing businesses in the program’s definition of “agricultural producers”, regardless of whether they reside in rural communities.
Make propulsion-related efficiency upgrades on fishing vessels eligible to receive support under REAP.
Allocate funds for the development of dedicated energy assessment and audit protocols designed to evaluate the feasibility and benefits of proposed REAP projects across a wide range of fishing vessels and regions.
Tailor language in the REAP application form to fishing businesses, making it easier for fishermen to provide required information pertaining to their vessels’ energy use.
On October 1, the USDA released “Unleashing American Energy and Economic Prosperity; Rural Energy for America Program (REAP)” in the Federal Register. The rule is a final rule, not a proposed rule. This means that there is, unfortunately, limited opportunity for members of the fishing community to meaningfully weigh in. That’s disappointing. However, it’s still worth making our voices heard because submitted comments will be read by agency staff and may factor into future revisions to the program. The 30-day public comment period ends on November 2, 2026 and I will be working with a team to develop a sign-on letter. You can also weigh in individually here.
This blog is your guide to what’s in the new rule and what it could mean for fishermen.
The backstory: Why is USDA revising REAP?
The USDA announced in March 2026 announced it would halt processing of REAP grant applications while it updated its program regulations to comply with Executive Order 14315, “Ending Market Distorting Subsidies for Unreliable, Foreign Controlled Energy Source.” A major focus of this executive order was the ending of federal incentives for wind and solar energy. The October 1 final rule represents the outcome of this internal update process.
The big picture: How does this rule change REAP?
The new rule introduces some major changes to how REAP is administered. One of the biggest is that the USDA will now require projects to be fully built and operational before the applicant applies for a grant. In the past, fishermen have secured funding prior to initiating a project, based on the output of an energy assessment which was conducted by a qualified expert. Those assessments (also called audits) were eligible for funding under a separate mechanism within REAP, and their primary purpose was to forecast energy savings that would occur if a proposed efficiency upgrade was installed. Decisions on REAP funding were then made based upon these forecasted savings.
Under the new structure, applicants must complete a project and show twelve months of documented energy savings prior to submitting a grant application. Any funding received is then applied retroactively, effectively refunding the recipient for a portion of their out-of-pocket project expenses. Unlike a typical rebate, however, the funding is not guaranteed and applicants must compete for it. Funding for energy assessments still exists under REAP, but there is no linkage between the two; under the new structure, the outputs of these assessments would not become inputs into an application for REAP funding.
While the rule states that the purpose of this change is to streamline the process and ensure that projects are “performance validated,” the change will force prospective applicants to bear the full financial risk of undertaking a project, without knowing whether or not their project might eventually receive any funding. This is likely to deter many would-be applicants from undertaking a project. Fishing industry incomes are notoriously variable. The existing REAP structure has functioned as a buffer that has enabled fishermen to undertake energy efficiency investments without fear of overextending themselves; the revised REAP structure will likely appear overly risky to many fishing businesses.
A possible benefit noted in the final rule is that the new structure gives prospective REAP recipients more flexibility in terms of when they start their project and what expenses they seek to include. In the past, an applicant had to plan out every detail of a project prior to submitting an application, and then adhere to this plan while completing the project on a timeline dictated by the grant award. Under the new structure, a prospective recipient has full control over what the project includes and when it is completed. However, they do not have any guarantee that the project, once complete, will receive funding.
Recognizing that fronting the out-of-pocket expenses to complete a full project is difficult for some prospective applicants, the USDA notes that REAP also includes a guaranteed loan program. The USDA states that potential applicants may utilize this loan program to finance a project, and then apply for a REAP grant to recoup much of the costs. In effect, this two-step utilization of REAP would function like a forgivable loan — but without any formal relationship between the loan and the grant (they are two separate applications and two separate funding decisions), there is a higher chance of never recouping the expenses (except in long-term energy savings).
Another major change in the overall REAP program is its prohibition of using funds to support the development of ground-mounted solar photovoltaics and wind turbines on cropland. While this change impacts farmers far more directly than fisherman, I feel it is worth mentioning that fishermen can benefit from agrivoltaics indirectly if their deployment reduces pressures placed on the marine environment to generate energy (e.g., through offshore wind or offshore oil and gas). Also, while it is assuredly in the public interest to ensure that energy does not crowd out the use of productive farmland for food production (fishing industry members have made similar arguments about marine food production in the context of offshore wind), I want to point out that sources like this one have found that net energy production per acre is 100-125x greater for solar photovoltaics than for corn-based ethanol, which is still heavily subsidized. Moreover, intensive row-crop farming for biofuels (such as corn and soy) requires high inputs of nitrogen and phosphorus fertilizers, herbicides, and pesticides, which often run off into waterways and oceans, with downstream effects on fisheries. Therefore, I would argue that perhaps the new prohibition against using REAP funds for solar on cropland is not altogether “fishery friendly,” especially since sources like this one assert that solar installations can co-exist with — and even enhance — farm production.
Eligible applicants: Are fishermen included?
As noted in the introduction to this blog, one of the recommendations surfacing from a multi-year collaborative effort that has taken place through the Fishery Friendly Climate Action Campaign is to make all fishermen are eligible to receive funding under REAP by including fishing businesses in the program’s definition of “agricultural producers.” Currently, fishermen are only eligible to receive REAP funds if they are “rural small businesses”, defined as businesses located in communities with less than 50,000 inhabitants. Effectively, rural fishermen have been eligible for REAP while non-rural fishermen have been ineligible. In contrast, farmers and aquaculture producers have been eligible regardless of where they reside or operate. We have sought to even the playing field.
The new rule does make revisions to the definition of agricultural producer that, in my reading of the text, will benefit fishermen. I'll walk you through them slowly because they’re somewhat complex.
This is the existing definition (found in 7 CFR 4280) of “agricultural producer” under REAP:
A person, including non-profits, directly engaged in the production of agricultural products through labor management and operations, including the cultivating, growing, and harvesting of plants and crops (including farming); breeding, raising, feeding, or housing of livestock (including ranching); forestry products; hydroponics; nursery stock; or aquaculture, whereby 50 percent or greater of their gross income is derived from the operations.
As you can see from this definition, fishermen have not been included as eligible producers in the past (although aquaculture producers have been). The new rule, which takes effect on October 16, defines “agricultural producer” as any for-profit organization that is 100% owned by an individual or an individual and their immediate family or is structured as a tribal corporation or other business entity wholly owned by an Indian Tribe, and produces or has the legal right to harvest an “agricultural commodity”, which is defined as:
An unprocessed product of Farms, Ranches, nurseries forests, and natural and man-made bodies of water that the Agricultural Producer has cultivated, raised, or harvested with legal access rights. Agricultural Commodities include plant and animal products and their by-products, such as crops, forestry products, hydroponics, nursery stock, aquaculture, meat, on-Farm generated manure, and fish and seafood products. Agricultural Commodities do not include animals raised or sold as pets, such as cats, dogs, and ferrets.
Although this wording does not explicitly say “fishermen are eligible”, it appears to implicitly include fishermen in two ways:
It replaces the original definition’s words “and harvested” with the words “or harvested,” indicating that taking part in a standalone harvesting activity (as opposed to a harvesting activity that is linked to cultivating and growing) is sufficient to qualify an entity as an agricultural producer;
It states that “fish and seafood products” constitute agricultural commodities, and mentions these items separately from aquaculture in the same list.
Therefore, based on my reading, I believe that the USDA may have expanded eligibility in the REAP program to include all fishermen — which is a win for the fishing industry. I will seek to confirm this through the USDA Office of Seafood and will post any updates here.
Eligible projects: Are vessels included?
One of the existing barriers to using REAP for fishing vessel-related energy efficiency investments has been the program’s longstanding prohibition on using funds for “vehicles.” As detailed in this report, Alaska fishermen have succeeded in using REAP funds to support non-propulsion-related investments, on the grounds that these energy loads (e.g., lighting and refrigeration) are more analogous to those used in a static facility than a vehicle, and are therefore eligible. A vessel’s propulsion system, in contrast, is more analogous to a “vehicle” and therefore ineligible. Fishermen have suggested expanding REAP eligibility to include propulsion-related efficiency upgrades on fishing vessels — a category that could include not only engines but also propellers, hull modifications, fuel flow meters, bottom paint treatments, stabilization technology, mobile gear design, and more.
Long story short, the new rule does not grant this wish. But it does add clarity to what REAP will and won’t fund.
Prior to the new rule, USDA’s REAP regulations simply stated that “costs for agricultural tillage equipment, used equipment, and vehicles” were “ineligible project costs.” This statement left much to the imagination, placing the responsibility on USDA administrators to interpret the meaning of “vehicle costs” for the purposes of evaluating applications from fishing vessels. Alaska fishermen and their NGO and consultant partners worked closely with USDA’s state office to land on the rule of thumb that non-propulsion investments are eligible for REAP while propulsion-related investments are not. Arriving at this conclusion took a considerable amount of consultation within the USDA. because the answers were not at all clear from the statute and regulations. This lack of clarity has likely contributed to the fact that we haven’t yet seen REAP utilized for fishing vessel projects in other states.
The new rule directly parses costs related to “mobile systems” that are and aren’t eligible to receive funding. Some of the costs that are explicitly eligible under the revised language include solar panels and battery storage systems that are directly mounted to a vehicle used to carry the applicant’s business operations, such as solar panels on a food truck used by the applicant to power the truck's refrigeration system or “in alignment with Executive Order 14276, improving the energy efficiency of a reverse osmosis system on a fisherman's boat.” The new rule also clearly states that “flexible fuel pumps, electric vehicles, electric vehicle chargers and charging stations” are not eligible. Nor are “vehicles, including motorized, unmotorized, and electric vehicles, and modifications that are used to improve a vehicle's ability to propel itself (e.g., modifying an existing vehicle's engine to run on renewable fuels or replacing an older vehicle with a new, more efficient vehicle).”
While these updates to the rule do not expand the types of projects eligible to receive funding on fishing vessels, the clarification that they provide may help program administrators more confidently award funds to non-propulsion based investments on fishing vessels.
Other changes
Other changes made by the new REAP rule include:
The grants program will require an applicant cost share of 75% of total project costs. The energy assessment or audit will require a cost share of 25% from the ultimate beneficiary (the business receiving the assessment).
Competitions will no longer take place at the state level, but at the national level.
Grantees will no longer be allowed to pay for their own labor to perform some of the work on their projects, due to a perceived potential for conflicts of interest.
Next steps
In the coming days, I’ll be reaching out to members of the fishing industry with expertise on REAP to write a comment letter for this opportunity. Reach out to me at fisheryfriendlyclimateaction@gmail.com if you would like to be part of this effort.
Once our letter is complete, we will circulate it through the Fishery Friendly Climate Action Campaign’s community list-serve for signatures from other members of the fishing community.
