Middle-income households will receive grants worth up to £15,000 to make their homes more energy efficient.
Grant Shapps, the business secretary, will announce plans next week to fund loft insulation, cavity wall insulation and smart heating controls.
The new fund, called “eco plus”, will be aimed at those who are able to pay, unlike other energy efficiency schemes.
The government has allocated £1 billion in funding from existing budgets for the next three years. Ministers will consult on plans to make the money available to people in council tax bands A to D. The government will meet 75 per cent of the cost of any upgrades.
The scheme, which will run from April, will cover efficiency measures for more than 70,000 homes and save hundreds