From September, homeowners and landlords can apply for vouchers to help to fund energy-saving home improvements, an amount which the Chancellor estimates will cover up to two thirds of costs per household.
For low income households, the government will provide vouchers to cover up to £10,000 of improvement works.
Rishi Sunak said the funding will help to make 650,000 homes more energy efficient while saving households £300 a year on bills. He also said the measures will be the carbon-cutting equivalent of taking 270,000 cars off the road while supporting around 140,000 green jobs.
Rishi Sunak will give grants worth a total £2 billion for energy-efficient home improvements, including installing insulation, double glazing and replacing old boilers.
The remaining £1 billion of the package will be spent making public buildings including schools and hospitals more environmentally friendly, with £50 million going towards retrofitting social housing with insulation, double glazing and heat pumps.
The Government will pay at least two thirds of the cost of energy-saving private home improvements under the Green Homes Grant, due to launch in September and last for one year.
This means that for an improvement costing £4,000 a homeowner would pay £1,320, while the Government would contribute the remaining £2,680.
Homeowners will apply online and be directed to accredited local suppliers, who will provide a quote. Once the work is approved, a voucher for the Government’s share of the cost will be issued.
Low income households will not have to contribute anything to the cost and could receive up to £10,000, Business Secretary Alok Sharma told the BBC earlier this week.
He said: "What [the scheme] ultimately means is lower bills for households, hundreds of pounds off energy bills every year, it's supporting jobs and is very good news for the environment."
The funding also aims to help Britain meet its legally binding target to cut greenhouse gas emissions to net zero by 2050.
Greenpeace UK pointed out that Britain’s green funding fell behind Germany and France, which have pledged £36 billion and £13.5 billion respectively.