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Texas decommissioning law for solar and battery projects

Updated · About 5 minutes

General information, not a substitute for the advice of an attorney.

A solar or battery lease can run for decades. Texas law requires the lease to say who removes the equipment at the end and how that removal is paid for. Here is what the statutes require, and the one timing detail most landowners miss.

Solar: Utilities Code Chapter 302

Chapter 302, added in 2021, sets required terms for solar leases signed on or after September 1, 2021 (Tex. Util. Code § 302.0005). The lease must require the developer to provide financial assurance for removal, such as a parent-company guaranty from an investment-grade company, a letter of credit, a bond, or another form reasonably acceptable to the landowner.

  • How much: the estimated cost to remove the facilities and restore the land as close as reasonably possible to its condition when the lease began, minus salvage value (less any value pledged to lenders).
  • Who estimates: an independent, third-party professional engineer licensed in Texas.
  • Updates: a new estimate by the 10th anniversary of commercial operation and at least every five years after.
  • Who pays for the assurance and estimates: the developer.
  • If the project is sold: the existing assurance stays in place until the new owner provides assurance that meets the law (§ 302.0005(g)).
The timing detail: the statute requires the assurance to be delivered no later than the earlier of the lease ending or the 20th anniversary of commercial operation (§ 302.0005(e)). That is the legal minimum. Landowners can try to negotiate for earlier security in the lease.

Battery storage: Chapter 303 (2025)

In 2025, HB 3809 added Chapter 303 for battery energy storage agreements, covering facilities of 1 megawatt-hour or more that are not owned by an electric utility (Tex. Util. Code ch. 303; HB 3809). It closely follows the solar rules and adds reuse and recycling duties, with one key difference: financial assurance is due by the earlier of the agreement ending or the 15th anniversary of battery operation (§ 303.0005(e)). Any lease term that tries to waive the chapter's protections is void, and a landowner harmed by a violation can get a court order (injunction) to stop further violations (§ 303.0003). If a solar or wind lease also allows batteries, the lease must include the battery provisions and enough financial assurance to cover them (Tex. Util. Code ch. 303).

2025 recycling changes for solar and wind

A separate 2025 law, HB 3228, added recycling duties for solar and wind projects and added recycling and disposal costs to the financial assurance formula. These changes, and Chapter 303, apply only to agreements signed on or after September 1, 2025 (HB 3228; HB 3809). Leases signed earlier follow the earlier rules.

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Questions to ask about any lease

  • What form of financial assurance will you provide, and can it start earlier than year 20 (year 15 for batteries)?
  • Who is the independent engineer, and will I get every updated estimate?
  • What exactly will be removed (panels, racking, cables, roads, foundations), and to what depth?
  • If batteries are allowed, how are recycling and disposal covered?
  • Was the lease signed before or after September 1, 2025? That decides which rules apply.

Summarized from the Texas Utilities Code and the enrolled bills linked above. Not legal advice; statutes change, so confirm current text with the Texas Legislature and an attorney.

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