More than 180,000 New Zealand homes will have access to grants for insulation and clean heating over the next four years, as part of a major investment in household energy efficiency.

"A large number of New Zealand homes are cold and damp because they are inadequately insulated. This scheme is an important step towards warmer homes as well as invigorating the retrofit industry," Energy and Resources Minister Gerry Brownlee says.

Budget 2009 $323.3 million over four years for a campaign to fit homes with insulation and clean heating devices such as heat pumps and approved wood burners. The scheme, which is open to owners and occupiers of houses built before 2000, will start on July 1 this year.

The New Zealand Insulation Fund's goal is to see up to 60,500 homes being insulated each year by 2012/13.

"It's designed to reduce health risks from living in cold, damp homes and provide energy efficiency gains," Mr Brownlee says.

"This scheme is also intended to play an important role in stimulating the economy. It will generate jobs for New Zealanders involved in producing and installing insulation and clean heating."

"Government grants of up to $1,800 will be available for houses built before 2000 that require ceiling and under floor insulation or a clean heating device, regardless of income," Mr Brownlee says.

For holders of Community Service Cards, additional Government funding will be available and this will be supplemented with private sector funding to cover the cost of the insulation and reduce the cost of clean heat devices.

The programme will be delivered through the Energy Efficiency and Conservation Authority (EECA) as part of its EnergyWise programme.

"The programme will work with private sector partners such as construction firms and energy retailers, as well as councils, health boards and iwi, so households can borrow money to help them invest further in a well insulated and warm home," Mr Brownlee says.

"By providing a simple, accessible grants programme with flexible finance options, and an ability to pay it back through your power bill or rates bill, more families will enjoy comfortable, warm, and healthy homes.

"At the same time, money will be set aside to ensure that low income households in particular are targeted."

The fund is made up of $243.7 million of new funding, on top of EECA's existing $79.6 million of home interest subsidies and home grants programmes, to provide $323.3 million for the New Zealand Insulation Fund over the next four years.

"I particularly thank the Green Party for its role in developing this project as part of the Memorandum of Understanding with the National Government," Mr Brownlee says.

While Budget 2009 reveals funding for the programme, more details will be announced at a formal launch in a few weeks.

"At that point we will announce the name of scheme, reveal the fund partners and start rolling out a marketing campaign."