HB 891 (Shin) and SB 443 (McPike) make utility-scale Battery Energy Storage Systems (BESS) a by-right use on any parcel that has previously been approved for utility-scale solar and that is subject to an approved special use permit, … or any other similar approval issued for a solar facility. In addition to taking away local decision-making, the legislation also exempts such installations from the requirement that applicants give the locality written notice of their intent to locate in such locality and request a meeting to negotiate a host siting agreement pursuant to Virginia law on the Siting of Solar Projects and Energy Storage Projects.
The legislature accepted a substitute version from the Governor (see Governor’s amendment in the nature of a substitute) that makes several technical changes and that (1) specifies that the by-right battery facility may not exceed … 100 percent of the of the nameplate generating capacity of the associated solar facility; and (2) reinstates the requirement for an applicant to notify the locality of their intent to locate a battery facility on the parcel of a previously approved solar installation. However, the new law, which will become effective July 1, 2026, states that …
The addition of the battery energy storage project pursuant to this section shall not alter, reduce, or otherwise affect any (i) payment obligations, financial commitments, or other terms contained in the existing special exception associated with the siting agreement for the approved solar project or (ii) state and local tax exemption from which the approved solar project benefits. Nothing in this subdivision shall be construed to affect or alter the state and local tax provisions under § 58.1-3660.
VACo opposed the legislation and requested a veto.
It is important to note the host siting agreement law was amended in 2021 to include battery storage projects as a way to offset the loss in revenue due to state mandated exemptions from local machinery and tools tax on the equipment – 80% exemption for the first 5 years of operation; 70% exemption for years 6-10; and 60% exemption for years 11 and beyond (see Legislature passes complex changes to laws regarding the siting and taxing of solar and energy storage projects – Virginia Association of Counties).
Without the ability to alter … payment obligations, financial commitments, or other terms contained in the existing special exception associated with the siting agreement for the approved solar project …, and because of loss in revenue due to state-mandated exemption from local taxes, counties cannot adequately address limited resources of their fire departments and public safety operations who must be familiar with the layouts and protocols for each site and have adequate resources to respond to fire and emergency calls.
VACo Contact: Joe Lerch, AICP