What happens if my on-site system produces more or less electricity than the REC Contract (between the Approved Vendor and utility) calls for?

If the system produces more than contracted under the REC Contract, the Approved Vendor gets no extra REC payments. If the system is producing less than contracted under the REC Contract, the Approved Vendor might be required to give some portion of REC payments back; check your agreement to understand if that has any implications for you.