Client Alert: New Pennsylvania Decommissioning Requirements For Commercial Solar Energy Facilities

Background

With the increase in commercial solar energy farms throughout Pennsylvania, more and more municipalities have adopted ordinances relating to the decommissioning of these facilities. In particular, these ordinances typically require solar energy developers to post bonds or other financial securities to cover the cost of decommissioning a project at the end of its useful life. The amount may be a specified percentage, e.g., 150% of the decommissioning costs (minus salvage and resale value, in some cases), depending on the jurisdiction. Other ordinances require a specific monetary amount, e.g., $50,000. Solar energy generation equipment can contain rare earth metals and hazardous materials that must be handled carefully to prevent harm to public health and the environment. Further, solar energy farms are often located on farmlands and other rural settings. Accordingly, municipalities and landowners wish to avoid having solar facilities abandoned in place.

Act 44

On July 20, 2026, Act 44 of 2026 (Pennsylvania Senate Bill 349), which outlines requirements for the decommissioning of solar energy generation facilities, was signed into law. The Act’s key provisions are as follows:

• Notably, Act 44 preempts local ordinances and regulations governing the decommissioning of solar energy facilities. As stated in the Act, “The regulation of the decommissioning of solar energy facilities is a matter of general Statewide interest that requires uniform Statewide regulation. This chapter and the regulations promulgated under this chapter constitute a comprehensive plan with respect to all aspects of solar energy facility agreements, financial assurance and decommissioning plans associated with solar energy facilities within this Commonwealth. Any county, municipal or other local government ordinance or regulation that materially impedes the purposes of this chapter shall be preempted and shall be without force and effect.”
• Fundamental Requirements. A grantee who executes a solar energy facility agreement must provide a decommissioning plan, submit proof of financial assurance to the county recorder of deeds, and provide notice to the surface property owner party of the solar energy facility agreement. The financial assurance secures the performance of the grantee's obligation to decommission their solar energy facility. If the grantee fails to fulfill their obligation to decommission the solar energy facility, the financial assurance will be made payable to the surface property owner.  A "Solar energy facility agreement” is a lease agreement between a grantee and a surface property owner that authorizes the grantee to operate a solar energy facility on leased property.
• A grantee must deliver a decommissioning plan and proof of financial assurance to the county recorder of deeds in accordance with the following requirements, which recognize that the term of a solar energy farm lease often extends for 25 years or more with extensions:
  • No later than 30 days before the commencement of construction of the solar energy facility,, the grantee must provide the county recorder of deeds with the decommissioning plan and proof of financial assurance in an amount equal to 10% of the estimated cost of decommissioning.
  • On or before the fifth anniversary of the commencement of construction of the solar energy facility, the grantee must provide the county recorder of deeds with an updated decommissioning plan and proof of financial assurance in an amount equal to 10% of the estimated cost of decommissioning.
  • On or before the 10th anniversary of the commencement of construction of the solar energy facility, the grantee must provide the county recorder of deeds with an updated decommissioning plan and proof of financial assurance in an amount equal to 40% of the estimated cost of decommissioning less the facility's salvage value, except that the required proof of financial assurance must not be less than 25% of the total estimated cost of decommissioning.
  • On or before the 15th anniversary of the commencement of construction of the solar energy facility, the grantee must provide the county recorder of deeds with an updated decommissioning plan and proof of financial assurance in an amount equal to 60% of the estimated cost of decommissioning, less the facility's salvage value, except that the required proof of financial assurance must not be less than 40% of the total estimated cost of decommissioning.
  • On or before the 20th anniversary of the commencement of construction of the solar energy facility, the grantee must provide the county recorder of deeds with an updated decommissioning plan and proof of financial assurance in an amount equal to 80% of the estimated cost of decommissioning, less the facility's salvage value, except that the required proof of financial assurance must not be less than 60% of the total estimated cost of decommissioning.
  • On or before the 25th anniversary of the commencement of construction of the solar energy facility, the grantee must provide the county recorder of deeds with an updated decommissioning plan and proof of financial assurance in an amount equal to 100% of the estimated cost of decommissioning, less the facility's salvage value, except that the required proof of financial assurance must not be less than 70% of the total estimated cost of decommissioning.
    • All estimated costs of decommissioning are to be determined by a third-party professional engineer. The calculation of the salvage value of the facility is limited to salvageable steel, aluminum, and copper.

• Decommissioning Plans. Within 180 days of the effective date of Act 44, the Department of Environmental Protection (the DEP) must, by regulation and in consultation with the solar energy industry, develop a provisional standard form for a decommissioning plan and financial assurance to be filed with the county recorder of deeds. Regulations promulgated to develop that provisional standard form will be deemed to be temporary regulations. After the promulgation of the temporary regulation, the DEP must, by regulation and in consultation with the solar energy industry, develop a final standard form for a decommissioning plan and financial assurance to be filed with the county recorder of deeds. The temporary regulations will expire upon the promulgation of the final regulations or two years after the effective date, whichever is later. The provisional standard form and final standard form must include the following provisions:
  • Unless the surface property owner and the grantee mutually agree in writing on an alternative condition for restoring the property, the grantee's decommissioning plan must include the following:
    • The removal of all non-utility-owned equipment, conduits, structures, fencing, and foundations to a depth of at least three feet below grade. The grantee will not be required to remove equipment and materials that the public utility requires to remain on site.
    • The removal of graveled areas and access roads, unless the surface property owner requests in writing that graveled areas and access roads remain in place.
    • The restoration of the property to a condition reasonably similar to the property's condition before the commencement of construction, including the replacement of topsoil removed or eroded on previously productive agricultural land.
    • The reseeding of a cleared area, unless the surface property owner requests in writing that the area not be reseeded due to plans for agricultural planting.
    • The required financial assurance.
  • Forms of Financial Assurance. Any of the following will be an acceptable form of financial assurance:
    • An escrow account.
    • A certificate of deposit or an automatically renewable, irrevocable letter of credit from a financial institution chartered or authorized to do business in the Commonwealth of Pennsylvania and regulated and examined by a Federal agency or the Commonwealth.
    • A bond executed between the grantee and a corporate surety licensed to do business in the Commonwealth.
    • A negotiable bond of the Federal Government, the Commonwealth, or a municipality within this Commonwealth.
  • Timing of Removal. A solar energy facility agreement executed after the effective date of Act 44 will provide that the grantee is responsible for decommissioning the grantee's solar energy facility on the surface property owner's property no later than 18 months after the facility has ceased producing electricity, except when the grantee is actively working to recommence production of electricity, including after the occurrence of a force majeure or similar event.
  • Act 44 does not apply to any of the following:
    • A solar energy facility with a nameplate capacity of two megawatts AC or less.
    • A customer- generator as defined in section 2 of the Alternative Energy Portfolio Standards Act.
    • An owner or operator of a normal agricultural operation as defined in section 2 of the act of June 10, 1982 referred to as the Right-to-Farm Law, who owns and operates a solar energy facility on the normal agricultural operation premises, regardless of the location or consumption of the energy generated.
  • A decommissioning plan, the associated financial assurance, and the salvage value of a solar energy facility to reduce the financial assurance cannot be separated from the solar energy facility through a change in grantee ownership. The new grantee must submit proof of financial assurance in accordance as provided in Act 44. The prior grantee must not release or revoke the prior grantee's financial assurance until the new grantee's proof of financial assurance is filed with the county recorder of deeds and notice is provided to the property owner party to the solar energy facility agreement.
  • Effective Date. Except for the requirement for the DEP to promulgate temporary regulations, which is effective immediately, the Act becomes effective in 180 days.

Conclusion

Act 44 places obligations and requirements on solar energy developers with respect to the decommissioning of solar generation facilities that are far more extensive than local existing ordinances.  Developers will now need to evaluate and take into consideration the impact of these requirements on proposed projects.

Norris McLaughlin, P.A. has extensive experience representing both solar energy developers and landowners with respect to solar energy farms throughout Pennsylvania as well as in other states. For more information, please do not hesitate to reach out to me at jlushis@norris-law.com.

John thanks Sarah Hamer, a 2026 Norris McLaughlin, P.A. Summer Associate, for her contributions to this blog.

About the Author – Law of the Land

John F. Lushis, Jr., Esq., is a Member of Norris McLaughlin, P.A. working out of the firm’s Allentown office. He focuses his practice on real estate, commercial transaction law, environmental law, financings, and renewable energy projects. John has an undergraduate degree in mechanical engineering as well as extensive experience with bituminous and anthracite coal operations and oil and gas leases.