Two-year contracts

Hello Kath,

The credit language requiring a 2-year contract, or any term-based contract, does not mean anything. Projects have always been allowed to purchase lump sum green power. The end result is the same; the same amount of green power is purchased.

Under a lump sum purchase no contract is required.

A few of my 100 LEED projects have purchased green power through long-term contracts. Most have not.

The credit requirements and language for green power are not actually written with long-term purchase commitments in mind. Entering into a four-year contract should earn a project an innovation point for purchasing double the required amount of power. Entering into an eight-year contract provides no "LEED" benefit to the owner.

I have a similar question to Kath, except the owner of my project is hesitant to engage in a 2-year contact because he feels he will be limited to a single green power provider for the 2 years and not have the option to shop around for the better price. The owner doesn't have a problem committing to providing 35% green power for the building, but its the contact term that is problematic in the eyes of the owner and losing the option to shop around and buying green power at different times as market conditions change.
Is there any way around this and still go for the credit? Thank you in advance!

As Henando points out the term is somewhat meaningless. The most common way this credit is earned is to buy RECs and pay for them all upfront. You just apply them over a two year period for the LEED calculations. No commitment required beyond the initial purchase.

I would just add that RECs are generally pretty cheap, and you're going to get a better price buying in bulk. Shop around when the owner wants to extent their commitment to a longer period.

Great, thanks for the comments! I think I was just a little confused with Hernando's response, but yes I understand now. Many thanks.

Along the same lines the owner has already purchased an REC for 1 year that offsets more then 35% of the building for 1 year. Could he now purchase another REC that is equal to another 35% offset of the building for Year 2? Would we need to word the contract somehow to say we are applying the 2nd REC for Year 2 of the building?

As long as the total purchase adds up to at least 35% of the electricity over the two years it does not matter. You do not have to hit 35% each year, just in total.