Michigan farmers and agricultural businesses are facing significant financial strain after the Trump administration rescinded funding under a long-standing rural energy program, leaving some businesses holding completed solar projects and no reimbursement. The Michigan Senate Energy and Environment Committee took up the issue Thursday, hearing testimony about the real-world consequences of the cancellation.
Why It Matters
The funding dispute puts Michigan agricultural operations in a difficult position: they completed projects in good faith, expecting federal reimbursement for up to half the cost, only to have the grants pulled after the work was done. For small farms already operating on tight margins, the financial exposure could be severe. The situation also raises broader questions about the reliability of federal grant commitments to rural businesses.
What Happened
The Rural Energy for America Program, established under the 2002 Farm Bill and formally launched in 2008, provides grants and guaranteed loans to help agricultural producers and rural small businesses fund renewable energy systems and energy efficiency upgrades. Under the program, grants could offset as much as half of a qualifying project’s total cost.
On April 15, the U.S. Department of Agriculture issued a notice rescinding funding for any project that had not yet secured a “fully executed financial assistance agreement” — meaning projects that were approved but not yet signed off on the government’s end were suddenly cut off. Businesses that had already built and paid for their projects were left waiting for reimbursements that are now being denied.
Allen Bonthuis, vice president of sales and marketing at Jackson-based Harvest Solar, testified before the committee about the bind his customers now face. The company has 25 projects across 18 client businesses, representing roughly $18 million in solar investments. Of that total, $7.7 million worth of projects are already complete, with customers having paid out of pocket in anticipation of reimbursement. Those customers are collectively being denied approximately $9 million.
Bonthuis described the situation in blunt terms. “USDA placed that agreement at the finish line,” he told the committee. “USDA is now refusing to sign it, and USDA is using the absence of its own signature as the reason to deny reimbursement. That is a catch-22 of the government’s own making.”
All 18 Harvest Solar clients filed appeals of the funding rescission. Every appeal was denied — not on the specific circumstances of each case, but on grounds of general applicability, meaning individual project details were not considered in the review process.
A Farm With Deep Roots
Kyle de Beausset, a Sierra Club member who manages Westcroft Gardens and Farm, also testified. The farm applied for Rural Energy for America Program funding in September 2024. Westcroft has historical significance — the land has been farmed since 1776 — and de Beausset spoke to the long-term stewardship perspective that comes with that history, noting that generational ties to a piece of land tend to shape how operators think about its future.
By the Numbers
- 18 — Michigan businesses affected through Harvest Solar alone
- $18 million — total solar investment across those 18 businesses
- $7.7 million — value of projects already completed and paid by customers
- $9 million — total in reimbursements currently being denied
- 50% — maximum share of project costs the program could cover through grants
- April 15 — date USDA issued the rescission notice
Zoom Out
The rural energy grant dispute is part of a broader pattern of federal funding uncertainty affecting states across the country, as the Trump administration reviews and in some cases halts disbursements tied to programs expanded under the previous administration. Michigan has faced related funding complications in other sectors as well — a lawsuit involving a $20 million state economic grant recently highlighted how quickly federal and state funding commitments can become contested, with Michigan’s broader economic pressures compounding the impact on businesses and local governments alike.
What’s Next
The Michigan Senate committee has not yet indicated what legislative action, if any, it may pursue in response to the testimony. Options available to state lawmakers are limited, as the funding decisions rest with a federal agency. Affected businesses may pursue further legal or administrative remedies, though all known appeals filed through Harvest Solar have already been rejected. The USDA has not announced any reversal of its April 15 rescission notice.