On May 29, 2025, Texas Governor Greg Abbott signed House Bill 3809 (HB 3809) 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. Shortly thereafter, on June 20, 2025, Governor Abbott signed House Bill 3228 (HB 3228) into law, establishing similar decommissioning and financial assurance obligations for wind and solar facility leases. Both bills became effective on September 1, 2025, and apply only to agreements entered into on or after that date. Solar, wind, and energy storage developers operating in Texas should ensure their lease forms reflect these new obligations.
Battery Energy Storage
Under HB 3809, battery energy storage facility leases, except those involving electric utilities, must include specific lessee obligations related to facility decommissioning. This includes the safe removal of facilities and storage resources, and the recycling of all recyclable components. Furthermore, the lessee must provide financial assurance to the landowner by the lease termination date or the 15th anniversary of the battery’s operational date, whichever is earlier. The amount of assurance must be sufficient to cover the costs of removal, recycling or disposal, and site restoration, minus the facility’s salvage value and any portion of the facility’s value encumbered to secure outstanding debt.
Wind Power Facilities
As amended by HB 3228, the Texas Utilities Code now requires wind facility leases to include specific lessee obligations for recycling or reusing all recyclable components and disposing of remaining components at authorized facilities. HB 3228 also expands financial assurance requirements for wind projects. The amount of financial assurance must be sufficient to cover removal, recycling or disposal, and site restoration costs, minus salvage value and any encumbered value. Updated cost and decommissioning estimates must be provided at least every five years during the agreement term, with the lessee bearing all associated costs.
Solar Facilities
As amended by HB 3228, the Texas Utilities Code imposes similar obligations on solar facility agreements. Solar facility leases must now require the lessee to recycle or reuse all recyclable components and dispose of all other components at designated facilities. Additionally, the provided financial assurance must be sufficient to cover removal, recycling or disposal, and site restoration costs, minus salvage value and any encumbered value. The first updated estimate is required on or before the 10th anniversary of the commercial operation date, with further updates provided at least every five years thereafter. The lessee is responsible for all related costs.
Conclusion
Collectively, HB 3809 and HB 3228 establish new requirements for energy storage, solar, and wind projects in Texas regarding the removal, recycling, and disposal of such facilities. As all leases executed after September 1, 2025, must comply with these new requirements, developers should review their site control forms to ensure alignment with the current version of the Texas Utilities Code.
