The policy has been criticised for assuming that in all cases renewable energy generation represents the most effective method of reducing CO2 emissions at any given location.
The policy has also met resistance from building developers because the onsite renewable energy equipment increases capital costs.
Supporters of the Merton Rule (and similar policies) argue that the revenue benefit accrues to the subsequent owner/occupiers in the form of reduced energy bills and increased equity – and as such the buildings carry a retail premium.
The advent of the UK Government's Feed in Tariff has significantly reduced the payback time of photovoltaic, and wind/hydro turbine renewable energy capital costs.
However, the proposal was finally rejected in 2014 and the Merton Rule remains in place, though the ability of Councils to require additional energy efficiency measures in new buildings was removed.