New Requirements for Wind, Solar, and Storage Facility Leases in Texas

This article is a follow-up to a previous article on a similar topic: “House Bill 3809 Adds Obligations to Battery Energy Storage Lessees in Texas.”

On May 29, 2025, Texas Governor Greg Abbott signed into law, adding new provisions to the Texas Utilities Code that impose decommissioning and financial assurance requirements for certain battery energy storage facility agreements in the state [H.B. 3809]. Shortly thereafter, on June 20, 2025, Governor Abbott signed into law, creating similar decommissioning and financial assurance obligations for wind and solar facility leases [H.B. 3228].

Both bills took effect on September 1, 2025, and apply only to agreements entered into on or after that date [Section 3 of H.B. 3809; Section 8 of H.B. 3228]. Solar, wind, and energy storage developers operating in Texas should ensure that their lease forms reflect these new obligations.

Battery Energy Storage

Under H.B. 3809, battery energy storage facility leases, other than those involving an electric utility, must include specific obligations for the tenant relating to the decommissioning of the facility, including the safe removal of facility and storage resources and the recycling of all recyclable components [New Sections 303.0004(a)-(b) of the Tex. Util. Code]. Additionally, tenants must provide financial assurance to the landowner before the earlier of the facility lease’s termination date or the 15th-anniversary of the battery operation date [New Section 303.0005(e) of the Tex. Util. Code]. The assurance amount must be sufficient to cover the cost of removal, recycling or disposal, and property restoration, less the salvage value of the facilities and any portion of the value of the facilities pledged to secure outstanding debt [Id. at subsection (b)].

Wind Power Facilities

As amended by H.B. 3228, Section 301.0003 of the Texas Utilities Code now requires that wind facility leases include specific obligations for the tenant to recycle or reuse all recyclable components and to dispose of the remaining components at authorized facilities [New Section 301.0003(a-1) of the Tex. Util. Code]. H.B. 3228 also expanded financial assurance requirements for wind projects [New Section 301.0004 of the Tex. Util. Code]. The amount of financial assurance must be sufficient to cover the costs of removal, recycling or disposal, and restoration costs, less the salvage value and any portion of the value of the facilities pledged to secure outstanding debt [Id. at subsection (b)]. Updated cost and salvage estimates must be provided at least once every five years for the duration of the agreement, with the tenant responsible for all costs associated with compliance [Id. at subsection (c)].

Solar Facilities

As amended by H.B. 3228, Sections 302.0004 and 302.0005 of the Texas Utilities Code impose similar obligations for solar power facility agreements [New Sections 302.0004-.0005 of the Tex. Util. Code]. Solar power facility agreements must now require tenants to recycle or reuse all recyclable components and to dispose of all other components at designated facilities [Id. at Section 302.0004(a-1)]. Additionally, the amount of financial assurance provided must be sufficient to cover removal, recycling or disposal, and restoration costs, less the salvage value and any portion of the value of the facilities pledged to secure outstanding debt [New Section 302.0005(b) of the Tex. Util. Code]. The first updated estimate is required on or before the tenth anniversary of the commercial operations date and further updates must be provided at least every five years [Id. at subsection (c)(2)]. The tenant is responsible for all associated costs [Id. at subsection (d)].

Conclusion

When taken together, H.B. 3809 and H.B. 3228 impose new requirements for storage, solar, and wind projects in Texas to remove, recycle, and dispose of such facilities [H.B. 3809; H.B. 3228]. Because all leases entered into after September 1, 2025, are required to comply with these new requirements, developers should check their site control forms to ensure that they are compliant with the current version of the Texas Utility Code [Section 3 of H.B. 3809; Section 8 of H.B. 3228].

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