USDA slams farm-solar; BOEM halts offshore—what founders must do now

Hi there,

Federal risk is up while fundamentals hold. USDA is pulling back support for wind/solar on prime farmland and barring “foreign adversary” panels across USDA-backed deals—assume REAP/B&I are off and re-underwrite farm sited projects. BOEM’s stop-work on the nearly complete Revolution Wind highlights construction stage policy risk—tighten force majeure, milestone, and insurance terms. Meanwhile, demand keeps pulling: data centers are driving utility procurement, China’s BESS deflation could reset IRRs, solar still leads 2025 additions, and ERCOT shows batteries muting price spikes.

🔦 Signals Worth Monitoring

🔨Headline: USDA tightens rules on solar/wind on farmland; bans “foreign adversary” panels in USDA-funded projects

What Happened: USDA announced it will halt support on prime farmland and restrict foreign-made panels in USDA-funded projects, with follow-up guidance indicating some projects may continue under heightened scrutiny.

Why Founders Should Care: REAP funding is likely not an option going forward for solar projects and domestic supply may not be enough to unlock government funds.

🔨Headline: BOEM halts nearly complete Revolution Wind

What Happened: BOEM issued a stop-work order for Ørsted’s 704 MW Revolution Wind project off RI/CT, citing unspecified national-security concerns. Project was ~80% built (45/65 turbines installed).

Why Founders Should Care: Highlights acute federal policy risk even for advanced projects—check force majeure language, insurance, milestone covenants, and cashflow buffers on construction stage assets.

🔨Headline: China storage “price war” talk after ultra-low cost launch in Shanghai

What Happened: A new BESS product unveiled at the EESA Shanghai trade show sparked industry debate on sub-$50/kWh pricing and a looming price war.

Why Founders Should Care: If sustained, module and container costs could fall faster than U.S. tariffs can offset.

🔨Headline: Entergy wins approval to build new capacity for Meta’s LA data center

What Happened: Louisiana PSC approved Entergy investments (new CCGTs, transmission, and fast-track up to 1.5 GW solar) to serve Meta’s $10B Richland Parish data-center campus.

Why Founders Should Care: Data-center loads are directly driving utility procurement—track aligned RFPs for solar and storage; site near large-load interconnects.

🔨Headline: EIA: Half of remaining 2025 U.S. capacity additions are solar

What Happened: Developers expect ~50% of new capacity from solar; storage is the #2 addition.

Why Founders Should Care: Near-term tailwinds for solar and storage remain despite policy headwinds. This will likely shift come 2026.

🔨Headline: ERCOT brushed near-record load; batteries muted price spikes

What Happened: Texas hit ~83.9 GW; real-time prices stayed tame as storage discharged through the evening ramp.

Why Founders Should Care: Revenue corridors are shifting toward ancillary + shape-arbitrage. If you haven’t learned about VPPs, now is the time.

🔨Headline: Google details per-prompt AI energy, water, and CO₂

What Happened: Google published a methodology and metrics for Gemini inference (median ~0.24 Wh, 0.26 ml water, 0.03 gCO₂ per text prompt).

Why Founders Should Care: Use these baselines to size data-center energy contract pitches.

🔨Headline: Sweden advances first new nuclear build in ~50 years

What Happened: Vattenfall moved supplier shortlisting for new Swedish reactors forward after Parliament approved a financing law for next-gen nuclear; Rolls-Royce and GE Vernova are in the frame.

Why Founders Should Care: SMR supply-chain and services are de-risking in the EU.

🔨Headline: Study: critical minerals in U.S. mine waste could supply millions of EVs

What Happened: New analysis highlights lithium/cobalt/REEs discarded in U.S. tailings, implying large recoverable streams with modest recovery rates.

Why Founders Should Care: Target DOE/DoD funding for domestic critical minerals recovery.

📌 RFP Bulletin

Nothing new this week we deemed flagging. Check the tracker for upcoming deadlines of RFP’s we’ve uncovered!

📝 Founder Briefing

USDA pulls back solar funding on farmland

USDA has effectively shut the door on most agency support for new wind and solar projects on productive farmland and removed key loan-guarantee pathways. REAP eligibility is being tightened (size and “right-sizing” tests), Business & Industry (B&I) guarantees are off-limits for wind/solar, and “foreign adversary” panels are barred across USDA-funded projects. A late clarification suggests some limited, right-sized on-farm systems could still proceed, but the default posture is restrictive. If you were counting on REAP/B&I/USDA-RD to pencil farm-sited solar, assume “no” and re-underwrite now.

What changed & when

• Aug 18–19: USDA announced it would halt support for wind/solar on productive farmland and bar use of panels from “foreign adversaries” in USDA-funded projects; B&I loan guarantees for wind/solar are ended.

• REAP tightening: Ground-mounted systems over ~50 kW and projects lacking documentation of historical onsite load are now disfavored/ineligible, with emphasis on “right-sized” behind-the-meter systems. (Interpretations vary by program notice and state office.)

• Context: USDA had already frozen/rewired parts of REAP/NEW ERA/PACE earlier this year; some previously obligated awards were allowed to proceed only after recipients “refocused” proposals to align with new priorities. Application windows also paused this summer in several states. Expect increased denials and returns.

Who’s most affected

• Farm-sited DG and community-scale solar (ground-mount on “prime/productive” land) that relied on REAP grants/guarantees or B&I loan guarantees.

• Rural co-ops and developers planning to blend USDA programs (PACE/NEW ERA/REAP) with tax credits.

What may still fly

• Rooftop or load-matched (<~50 kW) on-farm systems with strong energy-use documentation, using non-restricted modules—subject to state office interpretation and shifting guidance. Assume nothing; confirm in writing with your USDA RD state office.

📒 Founder Playbook and Takeaways

1. Salvage obligated awards: If you have previously obligated REAP/NEW ERA/PACE funds, immediately request your state RD office’s status in writing. Some funds were released contingent on resubmittal aligning with new priorities—deadlines have moved, but many recipients already had a 30-day resubmittal window this spring. Document all interactions for lenders/tax equity.

2. Replace USDA in the stack:

   • Debt: Local banks/credit unions with agricultural books, SBA 7(a)/504 for farm-adjacent businesses, C-PACE (county-enabled; not the USDA PACE program), and green banks (NY Green Bank, CT Green Bank, etc.).

   • Incentives: Lean harder on state programs (e.g., NYSERDA, MassCEC), utility DG tariffs, and demand-reduction revenues. (Note: federal tax-credit rules also shifted this month—model without USDA and with current IRS “beginning of construction” rules.)

   • Tax equity: Smaller, standardized tax equity for DG portfolios may still clear if host credit is strong and interconnection timelines are tight.

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