Middle-income families will receive grants of up to £1,500 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 target those who can afford to pay, unlike other energy efficiency schemes.
The government has allocated £1 billion from current 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 cover 75 percent of the cost of any upgrades.
The scheme, which will start from April, will cover efficiency measures for more than 70,000 homes and save hundreds