Renewable Energy Projects: Structuring REC Purchase and Sale Agreement, Interconnection Agreement

Negotiating Key Provisions, Navigating Regulatory Timelines and Requirements

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Thursday, April 5, 2018

Recorded event now available

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Program Materials

This CLE webinar will examine key considerations for counsel advising on renewable energy projects before entering renewable energy certificate (REC) purchase and sale agreements, net metering credit purchase agreements and interconnection agreements. The panel will discuss key components of each agreement and offer their perspectives and best practices for negotiating and structuring the agreements.


RECs offer project developers an increasingly important revenue stream to support renewable energy facility project development especially as states increasingly mandate renewable portfolio standards (RPS) to implement clean energy objectives. Such RECs can be created and sold in voluntary markets or become a mandatory compliance tool in states with mandatory RPS programs.

Either way, REC purchase and sale agreements form the transaction structure that allows REC sellers to disaggregate the sale of “renewable” attributes of electrons injected into the power grid as buyers of RECs enhance their generation mix with renewables.

Some states are increasingly encouraging REC purchase and sale agreements to support renewables and clean power. New York State became the first in the nation to define nuclear power generation as “zero-emission” and mandated that all of the state’s load-serving entities buy special RECs, called Zero-Emission Credits or ZECs, to support the greenhouse gas emission attributes of nuclear power plants.

When negotiating and structuring REC purchase and sale agreements, counsel should consider voluntary and mandatory REC programs that create markets for RECs, how RECs can be sold and to whom, parties’ termination rights, the buyer’s commitment to pay, and the applicable state regulatory structures and requirements for RECs, including the state’s use of alternative compliance payment mechanisms as an alternative to RECs. Counsel must also understand the state’s long-term RPS outlook and how supply/demand economics impacts future market values for RECs.

A related contract structure is called a Net Metering Credit Purchase Agreement and this structure is in use especially in states such as Massachusetts that allow so-called virtual net metering. In this scenario, the solar PV project is technically interconnected directly to the electric distribution system but customers can sign up to buy credits, thereby effectively assigning their energy load to be virtually covered by the project.

Interconnection is essential in delivery of energy to the grid and the generation of RECs. When structuring interconnection agreements, counsel should know the regulatory considerations and implications of whether the project operator is the site owner or the customer and the complexities that arise for REC transactions depending on the answer.

Counsel should also consider the circumstances under which the utility can disconnect the renewable energy project from the grid, and if disconnected, how the project can deliver to the end user. A related issue, when selling energy directly to a utility pursuant to the Public Utility Regulatory Policies Act, is whether the utility acquires associated RECs from the qualifying facility (QFs) automatically or whether the project developer can sell RECs separately from the energy generated from such QFs.

Counsel must carefully negotiate key provisions in each agreement and evaluate considerations, including regulatory obligations, before advising clients on executing the documentation.

Listen as our authoritative panel of energy counsel discusses navigating the regulatory and transactional structures involved in REC purchase and sale agreements. The panel will offer strategies for effectively negotiating the agreements.



  1. REC purchase and sale agreements
    1. Considerations
    2. Provisions
    3. Regulatory requirements
    4. Special considerations for Net Metering Credit Purchase Agreements
  2. Interconnection agreements
    1. Key considerations
    2. Key provisions
    3. PURPA QF issues
    4. Regulatory requirements
  3. Best practices for negotiating and structuring the agreements


The panel will review these and other key issues:

  • Key provisions that should be addressed when structuring REC purchase and sales agreements, Net Metering Credit Purchase Agreements, and interconnection agreements
  • Recognizing important regulatory structures by state and the role of PURPA in such transactions.
  • Long-term considerations for parties and their counsel entering these agreements
  • Strategies counsel should employ in drafting and negotiating both REC purchase and sales agreements and interconnection agreements


Humes, Stephen
Stephen J. Humes

Holland & Knight

Mr. Humes concentrates his practice in environmental, energy, public utility and infrastructure law. He advises clients...  |  Read More

Thall Peters, Kristen
Kristen Thall Peters

Cooper White & Cooper

Ms. Peters has extensive knowledge and experience with renewable energy projects having aided her clients in...  |  Read More

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