The Planning and Energy Bill cleared the Commons and gained an unopposed second reading after its introduction by Tory former minister Michael Fallon.
The legislation would allow councils in England and Wales to require a proportion of the energy used in developments come from renewable sources. They would also be able to set higher energy efficiency standards than current rules demand.
Tory Lord Hanningfield, who introduced the Bill, said it follows a pioneering initiative by the London Borough of Merton.
Merton requires at least 10 per cent of the energy needed for new housing developments to come from renewable or low carbon sources.
Lord Hanningfield told peers that the Bill was "permissive, localist and green" and "allows councils to act quickly without waiting years for other legislation to come into effect".
In the Commons ministers initially opposed the proposal, but later backed it after amendments were made to ensure councils did not take actions in conflict with national policies.