Pittsburgh, PA
Renewables Alert
(by Anna Jewart and Mary Binker)
On July 20, 2026, Pennsylvania Governor Josh Shapiro signed into law Act 44 of 2026 (Senate Bill 349) intended to establish a uniform, statewide framework governing decommissioning of utility-scale solar projects, codified as new Chapter 43 of Title 27 of the Pennsylvania Consolidated Statutes, 27 Pa. C.S. §§ 4301–4307 (Act 44). The new framework establishes mandatory decommissioning obligations for certain solar facilities, including phased financial assurance, and creates a path for development of a standard-form decommissioning plan. Perhaps most importantly, Act 44 expressly preempts any county, municipal or other local government ordinance that materially impedes the Act’s purposes.
I. Applicabilty.
Act 44 does not apply to all solar facilities that one might colloquially identify as “utility scale”. First, Act 44 applies to the execution of any “solar energy facility agreement” executed after the effective date of the Act. A “solar energy facility agreement” is defined as a “lease agreement between a grantee and a surface property owner that authorizes the grantee to operate a solar energy facility on leased property.” Consequently, the Act does not appear to apply to solar projects on land owned by the facility operator.
Second, the Act expressly does not apply to facilities with a nameplate capacity of two megawatts AC (2MW) or less. 27 Pa. C.S. §4307(1).
Third, it includes a carve out for customer-generators as defined in Section 2 of the Alternative Energy Portfolio Standards Act (AEPS). 27 Pa. C.S.§4307(2). Consequently, it does not appear to apply to commercial facilities operating under a Hommrich Rule, net-metering structure. See Hommrich v. Pennsylvania Pub. Utilities Comm’n, 231 A.3d 1027 (Pa. Cmwlth. 2020).
Finally, the Act does not apply to the owner or operator of a normal agricultural operation, as defined in the Right-to-Farm Law, see 3 P.S. §952, who owns and operates a solar energy facility on the premises “regardless of the location or consumption of the energy generated.” 27 Pa. C.S. §4307(3). This opens the door for some relief for agrivoltaics, but apparently only those where the farmer and operator are the same.
II. Decommissioning Obligations and Timelines.
The Act primarily establishes requirements for what must be included in lease agreements for non-exempt solar energy facilities executed after the effective date of the Act. These requirements become effective 180 days after enactment or on or about January 16, 2027. (PADEP’s rulemaking duty under Section 4304, discussed below, took effect immediately upon enactment on July 20, 2026.) “Solar energy facility agreements” executed after the effective date must provide that the “grantee” which the Act defines as the “owner of a solar energy facility on leased property” is responsible for decommissioning the grantee’s solar energy facility on the surface property owner’s property in accordance with the Act. 27 Pa.C.S. §§4301, 4302. Decommissioning must be confirmed to occur no later than 18 months after the facility has ceased producing electricity, including an instance after the occurrence of a force majeure or similar event. 27 Pa. C.S. §4302. While the 18-month timeframe is consistent with industry standards, the lack of relief for non-intentional cessation of operation is potentially problematic.
The Act also mandates inclusion of a “financial assurance” for decommissioning in non-exempt solar energy facility agreements. The amount of financial assurance must be equal to the estimated cost to decommission the facility, as prepared by a third-party professional engineer retained by the grantee from a list of professional engineers compiled and maintained by the Pennsylvania Department of Environmental Protection (PADEP). 27 Pa. C.S. §4303(b). PADEP is to publish said list of qualified engineers on its website. The estimate must be updated every five years.
Grantees must file a decommissioning plan and submit proof of financial assurance consistent with the Act with the county recorder of deeds and notify the surface property owner based on the following schedule:
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- No later than 30 days before commencement of construction, an amount equal to 10% of the estimated cost;
- On or before the 5th anniversary of commencement of construction, an amount equal to 10% of the estimated cost;
- On or before the 10th anniversary of the commencement of construction, an amount equal to 40% of the estimated cost, less the facility’s salvage value, except that said assurance shall not be less than 25% of the total estimated cost;
- On or before the 15th anniversary of construction, an amount equal to 60% of the estimated cost, less salvage value except that said assurance shall not be less than 40% of the total estimated cost;
- On or before the 20th anniversary of construction, an amount equal to 80% of the estimated cost, less salvage value, except that said assurance shall not be less than 60% of the total estimated cost.
- On or before the 25th anniversary of the commencement of construction, an amount equal to 100% of the estimated cost, less salvage value, except said assurance shall not be less than 70% of the total estimated cost.
27 Pa. C.S. § 4303(c). Salvage value can only include salvageable steel, aluminum and copper. Acceptable forms of financial assurance include escrow accounts, certificates of deposit or letters of credit from a financial institution or bonds from a corporate surety, Federal government, Commonwealth, or Pennsylvania municipality. 27 Pa. C.S. § 4303(d). Financial assurance, the decommissioning plan, and salvage-value reductions cannot be separated from the facility in a transfer; the prior grantee may not release its assurance until the new grantee’s proof is filed and the surface owner is notified. 27 Pa. C.S. § 4303(e).
III. Standard Decommissioning Plan Development, Content, and Process.
Act 44 also directs that, within 180 days of enactment, PADEP must, by regulation and in consultation with the solar industry, issue a provisional standard form decommissioning plan and financial assurance. 27 Pa. C.S. § 4304(a). These temporary regulations will expire upon promulgation of final regulations, or two years after the effective date of Section 4304, whichever is later. After promulgation of the temporary regulations, PADEP is directed to develop a final standard form decommissioning plan and financial assurances. Both the provisional and final standard form must include all of the following. The site-restoration requirements in items (1) through (4) apply unless the surface property owner and grantee mutually agree in writing to an alternative restoration condition; the financial assurance and forced-labor attestation are not subject to that waiver:
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- Removal of all non-utility owned equipment, conduits, structures, fencing and foundations to a depth of at least 3 feet below grade;
- Removal of graveled areas and access roads;
- Restoration to a condition reasonably similar to the condition before commencement of construction, including replacement of top soil removed or eroded on previously productive agricultural land;
- Reseeding of a cleared area unless requested in writing by the surface owner for plans for agricultural plantings;
- The required financial assurance; and
- An attestation from the grantee of its compliance with certain federal laws relating to the prevention of forced labor, specifically the Uyghur Forced Labor Prevention Act. 27 Pa. C.S. §§ 4304(b), 4305.
IV. Statewide Preemption.
As noted above, Act 44 declares decommissioning regulation a matter of statewide concern, establishes a comprehensive plan, and preempts any county, municipal, or local ordinance or regulation that materially impedes its purposes. 27 Pa. C.S. § 4306.
Please contact our team with questions or for assistance updating agreements, financial assurance programs, and decommissioning plans to align with Pennsylvania’s new Act 44.
Anna S. Jewart is an associate in the public sector and energy and natural resources groups of Babst Calland and focuses her practice on land use, zoning, and general municipal matters. Contact her at 412-253-8806 or ajewart@babstcalland.com. Mary H. Binker is a shareholder in the Corporate and Commercial, Emerging Technologies, and Real Estate, Land Use and Zoning groups and focuses primarily on corporate and transactional matters, including negotiation of commercial contracts and real estate acquisitions, leasing, and management agreements. Contact her at 412-6810 or mbinker@babstcalland.com.
