Briefing on the Merton Rule

The Renewable Energy Association and APSE Energy have promoted 'the Merton Rule' , which many wrongly believe was abolished by the Government. Stephen Cirell wrote the Briefing Note on the issue upon which their work is based.


There are a small number of local authorities that are famous for having taken the lead on a particular area of local government. A good example is Nottingham City Council, which came up with the now famous ‘Nottingham Declaration.’ Another good example is the London Borough of Merton, which introduced the ‘Merton Rule’.

Wikipedia describes the Merton Rule thus:

“The Merton Rule is named after the Council in the United Kingdom that in 2003 adopted the first prescriptive planning policy that required new commercial buildings over 1,000 square meters to generate at least 10% of their energy needs using on-site renewable energy equipment. The policy was developed and implemented by policy officers at Merton Council who received corporate and political support. Its impact was such that the Mayor of London and many other Councils also implemented it; and it became part of national planning guidance.”

The Merton Rule is well known in local authority circles, although many people might be a bit hazy on exactly what it requires. It is an important landmark, because it began a process whereby local authorities sought to ensure more renewable energy was being developed in their areas. This was at a time when climate change and global warming was rapidly moving up the policy agenda.

As is often the case, the reason that the Council felt the need to take action along these lines was the lack of Central Governmental policy on this area. Whilst this might have been considered to be a Central Government area of interest, for various political reasons this was not the case. So local government forged the way.

Since its inception, the Merton Rule has now been given legislative force (so more accurately its not the Merton Rule but the Planning and Environment Act 2008 (as amended) that we should be referring to), very nearly been abolished and been amended a number of times along the way.

This Briefing Note supports a joint initiative by the Renewable Energy Association and APSE Energy to reinvigorate the process commenced by the London Borough of Merton all those years ago: to increase the standards of building being applied in an area and to increase the level of renewable energy involved. It is doing this because over time the Merton Rule has faded with many authorities not now having any requirements of this nature in their regulatory processes. This means that many areas are failing to extract the maximum value from their statutory powers to the detriment of their local areas.

What is the Merton Rule?

As indicated above in the quote from Wikipedia, the Merton Rule is about two things: energy efficiency standards and the level of renewable energy being used in new buildings being developed in an area.

It should be emphasized that this briefing note is only about the latter area. This is because the powers available to a local authority to influence the former have been reduced by the Deregulation Act 2015.

So for these purposes, the Merton Rule is about requiring developers to generate a reasonable percentage of energy from renewable sources in relation to new buildings constructed in an area. The original requirement was 10%, although this level was amended in other areas adopting the rule.

A simple example might be that buildings should include solar PV or solar thermal panels or a biomass boiler as part of the design and construction of the new buildings.

The policy purpose behind this requirement was the UK’s emissions targets, both nationally and internationally. These are now enshrined in the Climate Change Act 2008, which requires the UK to meet emissions reductions in greenhouse gases of 80% by 2050, against a 1990 baseline. The Paris agreement of 2015 and the work of the IPCC is well known and has risen to even greater prominence since then. There are also targets from the EU in the Renewable Energy Directive that have 2020 as the next major milestone. The UK is currently behind in meeting these targets.

The Merton Rule was very successful in its early years. Developers were required to consider energy issues and ensure that their planning applications complied. As a result a great deal more renewable energy was fitted than would otherwise have been the case. However, progress has now slowed, to the detriment of areas around the country.

The Current Legal Position

The rule was introduced in London in 2003 as a Council requirement. As word spread of its potential influence and success, it was adopted by many other local authorities across the country. Merton LBC achieved a level of renown for its pioneering work in this area.

In 2008 the Government enshrined the rule in legislation. The Planning and Environment Act 2008, included as section 1 of the Act a permissive power for a local planning authority to include policies in their Development Plans imposing ‘reasonable requirements’ for energy used in a development in their area to be from renewable or low carbon sources; and for development to comply with energy efficiency standards that exceed the energy requirements of Building Regulations.

As the legislation was being enacted some years after the Merton Rule had been devised, it was updated at the same time, for example replacing the original requirement for the renewable energy to be ‘on site’ to ‘in the locality of the development.’ This addressed one of the criticisms of the original policy, which was that sometimes it was simply not possible to achieve this result on the actual site of the development.

As indicated above, the other part of the Merton Rule – on energy efficiency – was coming in for some criticism from the building industry, which did not like the concept of tighter rules being levied at local level. In particular, the Code for Sustainable Homes, which had been in force for some years, had been heavily criticized by the building industry.

As a result of this, the Government commissioned the Housing Standards Review in 2015. The Review looked at this whole area but concluded that the Code for Sustainable Homes was of questionable value. Unfortunately, the other part of the Merton Rule was also caught up in this debate.

Eric Pickles was Secretary of State for Communities and Local Government at the time and determined that Governmental action was required to remove unnecessary bureaucracy and simplify the building process. He had recommended that the Planning and Environment Act 2008 be repealed in its entirety.

As it turned out, the Government changed its mind at a late stage and only took action to curtail the powers of local authorities to impose greater energy efficiency standards in residential properties. It left the other provisions intact.

The Deregulation Act 2015 is the legislation that brought these changes into effect. Leaving aside the energy efficiency issues (which are more complicated), the renewable energy provisions in the Planning and Energy Act 2008 were amended by s43 of the Deregulation Act 2015 as follows:

Energy Policies

“A local planning authority in England may in their development plan documents, and a local planning authority in Wales may in their local development plan, include policies imposing reasonable requirements for -

(a) a proportion of energy used in development in their area to be energy from renewable sources in the locality of the development …."

This means that the original provisions are largely intact.

The following should be emphasized from this analysis:

• this is a permissive power, not a requirement. In other words, it is up to each planning authority whether to do this and what the reasonable percentage should be;

• the requirements must be reasonable, so a requirement for 50% renewable energy is unlikely to succeed;

• the energy does not need to be on the actual development site, but must be in the locality of the development. This gives more flexibility.

It is possible that such was the publicity given to Eric Pickles desire to abolish the Merton Rule provisions, that many authorities simply assumed this result had been achieved. When in fact a late reprieve means that the provisions are still on the Statute Book and in force. This might explain why the take up of the powers since then is less than might have been expected.

Current Government Policy

The Conservative Government that was elected in 2015 has not shown itself to be a friend of the green agenda. The Guardian ran a famous article on the nine green policies abolished by the new Government when it came to power - see

These ranged from scaling back Government incentives for key renewable energy technologies such as onshore wind and solar PV, to selling the Green Investment Bank and weakening the move to electric vehicles.

However, the most damaging of all the provisions that were swept away following the General Election was the abolition of the Zero Carbon Homes policy. Ten years of hard work to move towards a target of all domestic and commercial buildings being zero carbon between 2016-18 was gone in an instant. It was a devastating blow for everyone concerned with improving buildings. Several attempts to bring back this policy have so far failed. It is unlikely that this will change before 2020.

So the Merton Rule provisions of the Planning and Environment Act, as amended by the Deregulation Act 2015 have become even more important.

Why Would a Local Authority Want to Set Standards?

The building industry in the UK has been responsible over decades for building millions of poor quality buildings that are now in desperate need of retrofitting work. Almost half of the emissions in the UK come from buildings and action needs to be taken to deal with this, if the UK is to meet its national and international targets. But retrofit is both expensive and difficult: the only answer is to ensure that buildings are built to a much higher standard in the first place. And there is no excuse for railing against this – there is credible evidence now that much higher standards, such as Passivhaus, only cost marginally more to build at the outset. So threats by the building industry that this will kill jobs and constrain development are little more than bluster.

This might sound like a purist view from a mouthpiece for the anti greenhouse gas lobby. But in fact there are much more practical and local reasons why buildings need to improve their performance: that is that poor buildings cost much more to heat and maintain, putting more strain on local economic competitiveness in commercial terms, as well as local services and the NHS on a domestic level. This is where the role of local government comes in.

Local authorities should be using all the array of powers that are available to them to improve the quality of the buildings within their areas. Where this is housing, the powers are lower and do not include energy efficiency. But a local council can require a reasonable percentage of renewable energy from the site of a housing development or its locality. When it comes to commercial buildings, local authorities have greater powers and can require standards higher than Building Regulations, as well as a reasonable percentage of renewable energy from the site or its locality.

Taking action in this way will progress the environmental agenda but will also have an important social effect, having an impact on fuel poverty and other social problems that reflect back on the Council and its services.

The REA / APSE Energy Initiative

The Renewable Energy Association, the trade body for renewables in the UK, and APSE Energy, a non profit distributing, local authority owned organization, have teamed up to push the Merton Rule up the local political agenda. They hope to persuade more local authorities that they should adopt similar provisions and ensure that buildings in their areas benefit accordingly.

Renewable energy provisions are much more easily complied with now than previously, with solar PV being a good example of a technology where costs have tumbled. Whilst Feed in Tariff rates have drastically reduced, financial incentives do still exist. Equally, the Renewable Heat Incentive still provides help for biomass boilers or heat pumps on the heating side.

In the absence of any credible national Government policy in this area, it is up to local authorities to take the lead and to carry on the legacy created by the London Borough of Merton all those years ago.


This is an ideal time to take action on this area. There will be no further Government policy before 2020 and valuable time will have been lost in the interim.

All local authorities should therefore review whether they have Merton Rule policies in place and, if not, why not. Many authorities that do have in place such policies are willing to help others to introduce such provisions.

APSE Energy and the REA will be conducting a survey to try and ascertain how many such provisions there are and to promote good practice more widely, including how local authorities have benefitted by way of case studies.

Stephen Cirell is a consultant with APSE Energy, which is working with the REA on this issue.