Bonds, Insurance and Permit Conditions for Utility-Scale Solar and Battery Storage

Texas places decommissioning security in the lease between the facility owner and the landowner. House Bill 3228, effective September 1, 2025, amended the solar and wind chapters of the Utilities Code to require a bond, letter of credit or parent guaranty sized to removal, recycling and restoration costs net of salvage, set by a Texas professional engineer and updated over the life of the project. House Bill 3809 added a chapter for battery storage leases, and House Bill 3824 added fire-safety requirements for battery storage facilities that begin operating on or after January 1, 2027. Some counties also require road-use security for construction traffic.

California projects are approved by counties or, for eligible facilities that opt in, by the California Energy Commission, whose certification path comes with prevailing wage, skilled and trained workforce and community benefits agreement conditions. Battery storage owners must keep emergency response plans under state law, and the Public Utilities Commission's General Order 167-C, adopted March 13, 2025, extended its oversight to third-party battery owners. Desert counties such as Kern, Riverside, San Bernardino and Imperial use decommissioning, closure or reclamation security and road-repair terms, often in each project's conditions of approval.

In Nevada, renewable generating plants above 70 megawatts need a permit from the Public Utilities Commission under the Utility Environmental Protection Act, and the permit process calls for a decommissioning plan and a plan for funding it. Assembly Bill 493, effective October 1, 2025, added a decommissioning cost estimate for larger solar facilities, including battery storage on the same site. In Arizona, we did not verify an enacted statewide decommissioning security requirement, so projects on private land look to county zoning and the project's own approvals, and projects on federal land follow the Bureau of Land Management rules.

• Nevada: utility commission permits, decommissioning plans and cost estimates
• Arizona: county approvals and federal land rules

A decommissioning or reclamation bond guarantees an obligation that may not come due for decades, and the amount can be recalculated during that time. That is different from a construction performance bond, which ends when the work is accepted and the warranty period runs out. Sureties typically look at the strength of the obligor and any parent company, the engineering estimate behind the amount, salvage assumptions, how often the amount resets and whether the bond can be canceled or replaced. Collateral, indemnity from a parent and the choice between a bond and a letter of credit are common points in the discussion.

Because the holder may be a landowner, a county or a federal agency, the bond form also differs. Reading the lease, ordinance, condition of approval or regulation that requires the security, and confirming who must approve the form, comes before any surety submission.

Construction-phase insurance on solar and storage projects centers on high-value equipment that arrives in stages and is stored on large open sites, so builders risk values, transit and off-site storage, theft and weather exposures and delay in start-up deserve attention. Sitework on hundreds of acres raises erosion, stormwater and dust questions. Battery systems add fire and hazardous materials concerns that a contractors pollution policy and the general liability program may treat differently.

Owners commonly pass their indemnity and insurance requirements to the EPC contractor and on to civil and electrical subcontractors, so each tier reads the prime contract's insurance exhibit and indemnity terms before pricing its work.