Solar decommissioning rules are coming to Texas

Starting September 1, solar companies operating in Texas will need to comply with decommissioning requirements similar to those imposed on wind companies during the 2019 legislative session.

Senate Bill 760 requires solar power facility agreements to provide that the owner or “assignee” is responsible for removing its facilities from the landowner’s property. The bill cleared both the state’s House and Senate with near-unanimous support. It was signed by Gov. Greg Abbott on June 14.

Analysts said the law applies to solar power facility agreements, which are defined as a lease between a grantee and a landowner that authorizes the grantee to operate a solar power facility on the leased property. The bill defines the term “solar power facility” as including a solar energy device, such as solar panels, and any facilities or equipment used to support the operation of that device.

The bill also extends to easement agreements, but stops short of applying to ancillary agreements set up solely for transmission, energy storage, access, or collection line purposes. Even so, facilities and equipment such as battery storage facilities that are “used to support” a solar project will be subject to the decommissioning requirements.

The bill does not appear to apply to solar power facility agreements executed prior to September 1, or amendments to solar power facility agreements executed before or after the law’s effective date. Even so, leases that are amended after September 1 may be subject to the new requirements.

The bill only applies to a solar power facility that is a “generation asset.” The state’s Utilities Code defines those as assets associated with the production of electricity, including generation plants, electrical interconnections of the generation plant to the transmission system, fuel contracts, fuel transportation contracts, water contracts, lands, surface or subsurface water rights, emissions-related allowances, and gas pipeline interconnections.

The bill requires solar power facility agreements to include specific provisions describing the solar owner’s responsibility to remove project facilities from the landowner’s property. The scope includes not only solar equipment, transformers, substations, and overhead lines, but also foundations and buried cables, roads, and rock removal and surface restoration.

Solar power facility agreements will also need to include provisions indicating that the solar owner will be financially able to complete its restoration obligations. In the event of an asset sale, the obligation stays with the seller until the buyer provides replacement financial assurance to the landowner at or prior to closing.