RPS requires utilities and other load serving entities to source a certain percentage of their electricity from renewable energy. By contrast, FITs require these entities to buy the output of eligible renewable energy producers. In a FIT program, renewable energy producers are guaranteed a purchaser for their output, resulting in greater investor certainty.

The price developers receive under an RPS policy for their electricity is a function of the market. By contrast, in a FIT program, the price is determined by policy and must generally be sufficient to cover project development costs plus a profit. However, it may be difficult and costly to determine what this price should be to ensure it is not too low to encourage investment nor too high to make it untenable, especially as compared to market prices for other sources. In addition, even a balanced pricing approach may result in the prices under a FIT program being higher than market prices.

FIT programs require long-term contracts for the sale of the electricity. There is no such policy requirement in an RPS, although lenders often require a long-term power purchase agreement as a condition to extending any financing for the project.

FIT programs also require the utility to interconnect the project to the grid. This simplifies the contract and documentation process. By contrast, in an RPS program the developer has to enter into an interconnection agreement with the utility and if that utility is not the ultimate purchaser of the electricity, a transmission agreement to wheel the electricity to the customer.