Thirty thousand NSW homes will receive free solar panel systems or be able to upgrade their appliances to energy-saving models in a bid to tackle rising energy prices.
About one million low income earners in NSW, including concession, health care and DVA Gold Card holders, are already eligible for a scheme that provides $285 rebates on their annual power bills.
Under the state government's new $128 million Energy Bill Buster scheme, they will now be able to apply to trade in their rebates for a solar system to be installed at their homes.
The government says solar power will save consumers $600 on power bills annually.
People who can't have solar panels installed, such as those living in apartments, or renters, can instead swap the rebates for up to $4000 to upgrade their appliances.
"This Energy Bill Buster package is all about sending (Russian president Vladimir) Putin's power prices packing," Treasurer Matt Kean told reporters on Wednesday.
The war in Ukraine had been significant in pushing up the cost of power in NSW, Mr Kean said.
Unscheduled outages at coal-fired power plants, along with the rise in gas prices, meant there was no cheaper alternative fuel source to fill the gap.
"Because gas is so expensive, that's massively putting upward pressure on power prices," he said.
To be eligible for the solar scheme, home owners must already be receiving the Low Income Household Rebate and agree not to receive it for another ten years.
They must also live in a certain areas of NSW, including the Central Coast, North Coast, the Illawarra or a number of western and southern Sydney suburbs.
Premier Dominic Perrottet said the opportunity to invest in green technology would ease the pressure on household power bills, while also being good for the environment.
"We know that many families right across the state this time are going through a difficult time," he said.
"We want to use the NSW budget to help families budgets and set up a brighter future for the people of our state."
The scheme will initially be rolled out to 30,000 households, and further funding will be considered depending on the uptake.
The announcement is part of the 2022-23 budget to be delivered on June 21.
The Labor party said the government had failed to meet its promises on solar batteries made in the lead up to the last state election, creating a shortfall of more than 19,600 batteries.
"In the 2019 election you promised to roll out 300,000 solar battery systems over 10 years, including 20,000 this year," NSW Labor Leader Chris Minns said during question time.
"You've only managed to deliver 535 so far.
"Is this yet another reason why power prices are about to go through the roof?"
But the Climate Council backed the new energy policy, saying it would reduce power bills and cut emissions.
Climate Council campaigner Louis Brailsford said Australian homes lagged behind the rest of the world in terms of energy efficiency.
The surge in gas prices should spur governments to phase out fossil fuels in favour of cheaper renewables, he said.
"Strong policies and investment to reduce energy use can substantially reduce power bills and emissions."