Insights · Texas Energy and Land

Decommissioning Security in Texas Solar Wind and Battery Leases

By Worth Thornton · October 7, 2026

A renewable energy lease may continue for decades, but the landowner's concern does not end with the last rent payment. Equipment must be removed, disturbed ground addressed, and the property left in the condition required by the agreement and applicable law. The practical question is whether a responsible party and usable financial security will remain when that work is due.

Texas has separate statutory frameworks for wind, solar, and battery energy storage facility agreements. They establish important protections, but they are not identical. The project, parties, agreement date, and statutory definitions determine which provisions apply. The following discussion distinguishes that baseline from additional protections a landowner may negotiate.

Identify the Applicable Law First

Texas Utilities Code Chapter 301 addresses wind power facility agreements, Chapter 302 addresses covered solar power facility agreements, and Chapter 303 addresses covered battery energy storage agreements. [1–3] These are defined categories, not a single rule governing every energy installation. For example, Chapter 303 defines a battery resource by reference to an electrochemical device with capacity of at least one megawatt hour and excludes electric utilities from its definition of grantee.

The Legislature changed wind and solar recycling and disposal provisions and enacted the battery chapter in 2025. The respective enactments apply to agreements entered into on or after September 1, 2025; earlier agreements require analysis under the applicable prior law. [4–5] Do not assume that the newest statutory text automatically rewrites every older lease. Renewals, amendments, and hybrid projects deserve specific review.

A Removal Promise Is Only Part of the Protection

Read the removal obligations separately from the financial assurance clause. Identify the facilities the operator must remove, the depth of required underground removal, and the required restoration work. The chapters address subjects including equipment, foundations, buried cables, overhead lines, and component recycling or disposal. [1–3]

Some road removal and restoration obligations depend on a timely landowner request and, for specified restoration work, reasonableness. Calendar the applicable notice triggers rather than assuming every improvement will automatically be removed. Decide which roads or other improvements the owner might want to retain, and document that decision through the required process.

Understand When Statutory Security Must Be Delivered

For agreements governed by the respective provisions, the statutory outside dates for delivery differ. Wind financial assurance is due no later than the earlier of termination or the tenth anniversary of the defined commercial operations date. Solar uses the earlier of termination or the twentieth anniversary of that date. Standalone battery agreements covered by Chapter 303 use the earlier of termination or the fifteenth anniversary of the defined battery operation date. [1–3]

Those are statutory deadlines, not a recommendation that the owner remain unsecured until then. A project can encounter trouble during construction or early operation. Consider negotiating security before major disturbance or construction, with adjustments as the physical exposure increases. Any earlier delivery requirement should appear clearly in the lease and the actual security instrument.

Test the Amount Against the Work

The statutory assurance provisions address estimated removal and restoration costs, recycling or disposal, salvage value, and equipment value pledged to debt. They require estimates involving an independent professional engineer licensed in Texas, along with ongoing sufficiency and update requirements. [1–3] Review the applicable chapter's schedule; do not substitute a single assumed timetable for all three technologies.

For negotiation purposes, ask whether the estimate includes mobilization, excavation, hauling, lawful disposal, soil work, and the facilities actually on the property. Have qualified engineers evaluate technical scope and cost. Examine salvage assumptions and lender claims carefully so the same equipment value is not treated as freely available cash when it may not be available to fund the work.

Read the Security Instrument Itself

The chapters recognize specified forms of financial assurance, including qualifying parent guaranties, letters of credit, and bonds. [1–3] Those instruments do not provide identical practical protection. A guaranty depends on the guarantor's credit and enforceability. A letter of credit depends on its issuer, terms, expiry, and draw requirements. A bond depends on the obligations covered and the conditions for a claim.

Confirm the correct beneficiary, amount, covered property, triggering events, renewal mechanics, and evidence needed to obtain funds. Consider a replacement obligation if the issuer or guarantor no longer meets the negotiated standard. An insurance certificate should not be accepted as equivalent to decommissioning security without analyzing what it actually covers.

Prevent Gaps When the Project Changes Hands

The current chapters address continued financial security when facilities are transferred and restrict cancellation before required removal obligations are completed unless replacement assurance is provided. [1–3] Reconcile those rules with the lease's assignment, lender, and release provisions.

Negotiate a clear process for receiving replacement instruments and updated contacts. A project sale should not leave the landowner trying to determine which entity holds the cleanup obligation. Consider who remains liable, which guarantees survive, and whether the replacement security can be verified before an existing instrument is released.

Treat Battery Equipment Deliberately

A battery installation creates its own removal, reuse, recycling, and disposal issues. Chapter 303 generally applies to battery facilities outside Chapters 301 and 302, with an important provision for batteries authorized under wind or solar agreements. Section 303.0004(c) requires those agreements to address specified battery reuse, recycling, and disposal duties and sufficient assurance for those duties. [3]

Do not apply the standalone battery delivery date mechanically to every colocated system. Identify how the lease authorizes batteries, which chapter governs, and whether the assurance accounts for the battery equipment. Operational safety, emergency response, and environmental liability also require separate attention; a decommissioning bond does not answer every operating risk.

Define the End Condition Before Construction

Take dated photographs and document roads, drainage, fencing, soil conditions, and existing improvements. Translate the desired restoration outcome into workable contract standards, with appropriate engineering or agricultural input. Address inspection, incomplete work, replacement vegetation, and the release of security only after the required obligations are satisfied.

Bring the proposed lease, project layout, decommissioning plan, cost estimate, and security form to the review. Learn more about Worth Thornton's renewable energy practice or contact Worth Thornton to discuss the removal and security provisions in a Texas energy lease.

This article provides general information about Texas law and contract planning. It is not legal advice for a particular property or dispute. Reading it or contacting Worth Thornton does not create an attorney client relationship.

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