Energy Storage

Texas Enacts Comprehensive Decommissioning Requirements for Battery Energy Storage Systems

By Scott Deatherage · S Deatherage Law, PLLC · January 27, 2026

New law imposes non-waivable obligations on BESS projects starting September 1, 2025. Texas has taken a significant step in regulating the rapidly expanding battery energy storage sector. House Bill 3809 established Chapter 303 of the Texas Utilities Code — a comprehensive framework governing decommissioning obligations for battery energy storage systems (BESS) not owned by electric utilities.

While the law closely mirrors existing decommissioning requirements for solar and wind projects under Chapters 302 and 301, it introduces critical new provisions specific to battery storage that developers, operators, and landowners need to understand.

What’s Covered?

HB 3809 applies to:

• Standalone BESS lease agreements executed on or after September 1, 2025,
• Wind or solar power facility leases that authorize BESS operations,
• Any amendments to pre-existing leases (careful consideration required).

Key Requirements You Need to Know

1. Comprehensive Physical Removal

The law mandates removal of all BESS infrastructure, including:

• Battery units, transformers, and substations,
• Overhead lines and buried cables (to at least 3 feet below surface),
• Foundations (excavated 3 feet deeper than the original structure),
• Backfilling with similar soil.

Additionally, landowners can request within 180 days of decommissioning notice:

• Road removal,
• Extraction of rocks 12 inches or larger,
• Grade restoration and return to tillable state,
• Reseeding with native plants.

2. Environmental Responsibility: The Recycling Mandate

Here’s what sets BESS apart from solar and wind requirements: HB 3809 imposes affirmative recycling and disposal obligations. Operators must:

• Reuse or recycle all components capable of being recycled,
• Ship materials for recycling if not processed on-site,
• Properly dispose of non-recyclable components,
• Comply with environmental standards for hazardous materials.

This represents a significant evolution in Texas energy law, recognizing the unique environmental challenges posed by battery materials at end-of-life.

3. Financial Assurance: Earlier and More Comprehensive

Financial assurance must be provided by the earlier of:

• Lease termination, or
• The 15th anniversary of battery operations.

(Note: This differs from the 20-year solar and 10-year wind financial assurance deadlines.)

The assurance amount must equal estimated costs of:

• Facility removal,
• Land restoration,
• Recycling and disposal (new requirement not required of wind or solar projects),
• Removal estimate is calculated and then salvage value is subtracted (excluding debt-pledged assets).

An independent Texas-licensed professional engineer must:

• Provide initial cost estimates by the 10th anniversary of operations,
• Update estimates every 5 years thereafter.

Acceptable forms of financial assurance include parent guaranties, letters of credit, bonds, or other instruments reasonably acceptable to the landowner.

Non-Waivable Provisions

Perhaps most importantly: any lease provision attempting to waive Chapter 303 obligations is void and unenforceable. Landowners retain the right to seek injunctive relief and all other available legal remedies.

Looking Ahead

As battery storage becomes increasingly critical to grid reliability and renewable energy integration, this law provides the regulatory foundation for sustainable, responsible development.

At S Deatherage Law, PLLC, we have experience in negotiating over 100 renewable energy leases and project development work on over $10 billion in solar, wind, battery, and natural gas generation projects across Texas. If we can answer any questions regarding the new BESS decommissioning requirements, please do not hesitate to contact us.