New homes will be powered by sun, wind and water under radical proposals to turn Brighton and Hove into the greenest city in the country.

Under new building guidelines, any development of three or more homes must be carbon neutral or offset emissions by improving the energy efficiency of the city's current stock of Regency, Victorian and post-war homes.

Millions of pounds in grants will be generated to plough into insulation in lofts and cavity walls to improve heating systems and reduce draughts in exisiting properties.

The planning policy, which is at the forefront of ecological thinking, was approved last night by councillors on the environment committee and will now be put out to consultation.

Every new building project, apart from the very smallest, will be required to cut 25 per cent of its overall heating and electricity consumption from fossil fuels.

Council bosses want developers to reach the target by using renewable energy like solar panels, wind turbines and water power as well as low carbon options through the grid and mains gas to generate heat and power more efficiently.

And the overall project must also be carbon neutral in terms of energy use.

This means that if the development is creating CO2, it must offset it by improving other properties at a cost of up to £2,500 per tonne of the green house gas.

With 11,000 new homes to be built across Brighton and Hove in the next 20 years, these new planning guidelines will produce millions of pounds in payoffs to improve current homes in Brighton and Hove that are 10 years old or more.

Medium and large commercial developments as well as residential extensions, conversions and changes of use involving three or more flats will also be required to cut energy consumption by 20 per cent by using low or carbon neutral technology.

The Sustainable Building Design report reveals: "The ability to achieve net annual zero carbon emissions from energy use may be affected by technical and or financial factors.

"In such cases, contributions could be made to enable energy savings in the vicinity of the development site to deliver outstanding on-site carbon emissions and give the developer due credit."

Martin Randall, Brighton and Hove City Council's head of planning, said the contribution would be available to homes in the development's neighbourhood.

He said: "It is radical and innovative but we do not believe we have pushed beyond the boundaries of what is acceptable.

"I believe we are at the forefront of sustainable building."

Mr Randall added that planning guidelines on the positioning of wind turbines and solar panels were also being issued to ensure that conservation areas were protected.

New housing developments will also have to contribute towards the planting of 64,000 new trees the council want to see introduced across the city in the next 50 years.

On hot days, town and city temperatures are up to 60 per cent higher than the surrounding countryside due to a phenomenon called the urban heat island effect.

This can be reduced by planting vegetation and shrubs and trees and helps to curb the need for air-conditioning.

The council's environment committee also agreed last night on tougher restrictions on developments of one or two homes.

Conservative councillors and council officers wanted to set the policy at the lowest level of the national code for sustainable homes to avoid putting off developers.

Tory councillor Garry Peltzer Dunn said: "I would hate to think we might lose some developers or some homes just because we are insisting on a certain standard."

But Green and Labour councillors banded together to vote to abide by level three of the code - a tougher set of demands that requires builders to allow only 105 litres of water per householder per day, reduce standard domestic carbon emissions by 25 per cent and choose from a selection of other environmental measures under a complicated points system.

Green councillor Paul Steedman said: "This is absolutely great. It is going to put us in a real leadership position as a city on green issues over the coming years."

Labour's Gill Mitchell, who chaired the environment committee before the city council elections, said the policy was an "incredible achievement".

She said: "This is a really proud day. I think it will inform Government policy as I don't think it has been done anywhere else."

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