Energy efficiency upgrades will be offered to about 800 low income households, following the announcement of a $6 million initiative by the Victorian government.

The Making Home Energy More Affordable program will include appliance replacement, home renovations and solar panel installation, with bill savings estimated at $500 a year, based on a โ€œtypicalโ€ $4500 retrofit including draught proofing, ceiling insulation and a heater upgrade.

The program will also provide access to low and no-interest loans.

โ€œWhile power prices are set by the retailers, weโ€™re providing support to help Victorian households take control of their energy use,โ€ Victorian energy, environment and climate change minister Lily Dโ€™Ambrosio said.

A media statement said the government would be partnering with community organisations to deliver the best outcomes for low-income households.

The program announcement fills a gap left when the federal governmentโ€™s Low Income Energy Efficiency Program funding was stopped.

The news was welcomed by Environment Victoria, which said it was encouraging the state government was stepping in to address the gap.

โ€œThese retrofits will significantly improve the lives of vulnerable Victorian families, making their homes safer, more comfortable and cheaper to live in,โ€ Environment Victoria efficiency campaigner Anne Martinelli said.

Ms Martinelli said the government also needed to work on improving of the housing stock more generally.

โ€œAs things stand, with our homes averaging less than two stars in terms of efficiency performance, Victorians are being locked into a future of unnecessarily high energy bills and the health risks of living in dangerously hot homes during the longer, hotter heatwaves that climate change will bring,โ€ she said.

โ€œWe are looking to the Victorian government for leadership on sensible policy reforms such as better standards for new and rental homes to drive the broad-scale improvement we need if our homes are to meet the challenges of the future.โ€

Ms Martinelli said decisive action made sense as efficiency improvements would save money as well as contribute to the governmentโ€™s recently announced 2020 emissions reduction target of 15-20 per cent based on 2005 levels.

The Energy Efficiency Council also welcomed the move, saying it could improve health outcomes as well as reduce carbon and bills.

โ€œOver 3000 Australians a year die during periods of hot and cold weather,โ€ EEC chief executive Luke Menzel said. โ€œUpgrading these homes will make them safer and more comfortable during periods when temperatures are very high or very low.โ€

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