Massachusetts Zoning and Regulatory Issues in Battery Energy Storage System (BESS) Leases

Battery Energy Storage System (“BESS”) projects are increasingly proposed on industrial, commercial, and underutilized land throughout Massachusetts. For landowners, these projects can present a long-term income opportunity—but they also raise land use, zoning, and regulatory issues that differ meaningfully from traditional commercial ground leases.

This article focuses on Massachusetts-specific zoning, permitting, and regulatory considerations that landowners should evaluate when negotiating a BESS lease, particularly during the option and development phases.

BESS Projects Are Land Use Projects, Not Just Energy Projects

In Massachusetts, a BESS installation is first and foremost a land use. Regardless of the broader clean-energy policy environment, a BESS project must comply with local zoning bylaws, site plan review requirements, and applicable state and local permitting regimes.

For landowners, this distinction matters because:

• Entitlement risk can extend for years;
• Local opposition and public process can materially affect timing and feasibility; and
• Lease documents often allocate these risks to the landowner—sometimes unintentionally.

Understanding how BESS projects are treated under local zoning is a threshold issue before site control is granted.

Zoning Classification of BESS Uses in Massachusetts

Municipal Zoning Treatment Varies Widely

Massachusetts does not have a uniform statewide zoning classification for BESS facilities. Municipal treatment varies significantly, including:

• BESS classified as a principal use, accessory use, or utility use;
• BESS allowed by right in certain zoning districts;
• BESS requiring site plan approval, special permits, or variances; or
• BESS prohibited outright absent zoning relief.

Landowners should not assume that a BESS project is permitted simply because solar or other energy uses are allowed on the property.

Importance of Local Zoning Analysis

Before entering into a lease or option agreement, landowners should confirm:

• Whether BESS is an allowed use in the applicable zoning district;
• The level of discretionary review required;
• Any dimensional, setback, height, or screening requirements; and
• Whether the bylaw distinguishes between small-scale and utility-scale systems.

Early zoning diligence can materially affect both lease economics and project viability.

Allocation of Permitting and Entitlement Responsibility

Developer Responsibility Is Standard—but Not Absolute

Most BESS leases place primary responsibility for zoning and permitting on the developer. However, Massachusetts leases frequently include provisions requiring the landowner to:

• Join in zoning or permit applications;
• Execute affidavits, easements, or covenant documents;
• Grant temporary access for testing and engineering work; or
• Refrain from objecting to proposed approvals.

These cooperation provisions should be carefully limited to avoid inadvertently shifting entitlement risk back to the landowner.

Massachusetts Environmental and State-Level Approvals

MEPA and State Agency Review

Depending on project size and location, a BESS facility may implicate:

• Massachusetts Environmental Policy Act (MEPA) review;
• Department of Environmental Protection (MassDEP) approvals;
• Wetlands Protection Act filings at the local Conservation Commission level; or
• Utility interconnection approvals with Eversource, National Grid, or municipal utilities.

Landowners should ensure the lease clearly allocates responsibility for:

• Preparing and prosecuting filings;
• Bearing associated costs; and
• Responding to agency conditions.

No Implied Obligation to Secure Approvals

From a landowner perspective, it is critical that the lease:

• Disclaims any obligation to guarantee approval outcomes; and
• Allows termination if approvals are not obtained by a defined outside date.

Absent clear termination rights, landowners may find their property encumbered for extended periods with no viable project.

Development Periods, Exclusivity, and Drop-Dead Dates

Lengthy Development Periods Are Common

In Massachusetts, BESS development timelines can extend well beyond initial expectations due to:

• Zoning hearings and appeals;
• Fire department and emergency response review;
• Utility interconnection constraints; and
• Community opposition.

Leases often include multi-year option or development periods during which the landowner’s property is effectively encumbered.

Protecting Against Indefinite Encumbrance

Landowners should focus on:

• Clearly defined outside dates for permit issuance;
• Clear termination process if milestones are not met;
• Limitations on exclusivity to the specific project footprint; and
• Adequate option payments or development rent.

These provisions help ensure the property does not remain tied up indefinitely without compensation.

Interaction With Existing Mortgages and Property Interests

Lender Consent and Subordination Issues

Many Massachusetts properties are already subject to:

• Mortgages;
• Existing ground leases; or
• Utility or access easements.

BESS developers frequently request:

• Subordination or non-disturbance agreements (SNDAs);
• Estoppel certificates; or
• Recognition agreements from lenders.

Landowners should ensure the lease:

• Conditions effectiveness on required third-party consents; and
• Avoids placing the landowner in default under existing financing documents.

Practical Takeaways for Massachusetts Landowners

For landowners considering a BESS lease in Massachusetts:

• Do not assume BESS is a permitted use under local zoning;
• Carefully limit cooperation obligations during permitting;
• Insist on clear outside dates and termination rights;
• Avoid open-ended exclusivity during development; and
• Coordinate lease terms with existing mortgages and land use restrictions.

Early attention to zoning and regulatory structure can materially reduce risk before long-term operational obligations attach.

Conclusion

BESS leases in Massachusetts implicate complex zoning and regulatory considerations that extend far beyond standard commercial leasing issues. For landowners, thoughtful allocation of entitlement risk and careful structuring of development obligations are essential to protecting long-term property value and flexibility.