Almost one million Victorians will be given $250 by the state government to help pay their power bills, while thousands more will be eligible for grants to make their homes more energy-efficient.
Environment Minister Lily D'Ambrosio on Tuesday announced $797 million in the state's November 24 budget will go towards delivering the "biggest household energy efficiency package in any state's history".
"It will make a significant difference to people's power bills, it will put money back into the pockets of Victorians, it will create thousands of jobs and, of course, reduce our emissions," Ms D'Ambrosio told reporters.
The package includes a one-off $250 payment to help an estimated 950,000 Victorian households struggling to pay their bills.
Concession card holders, including anyone receiving JobSeeker, youth allowance or the pension will be eligible for the payment, which will be available online from February 1 to January 31, 2022.
Ms D'Ambrosio said many Victorians had higher electricity costs this year as they were required to stay at home under the state's COVID-19 restrictions.
"This is going to the heart of those difficulties that people have been having," she said.
Some $335 million in funding will go towards helping low-income families replace old wood, electric or gas-fired heaters with energy-efficient systems.
It's estimated the program will save 250,000 households between $300 to $900 each year on their energy bills.
A further $112 million will be spent on sealing windows and doors, and upgrade heating, cooling and hot water systems in 35,000 social housing properties.
The government will also expand its Solar Homes program to provide solar panel rebates for an additional 42,000 households and 15,000 rebates for small businesses for the first time.
Minimum efficiency standards for insulation, draught sealing and hot water systems will also be introduced for rental properties.
The government expects it will help reduce bills for about 320,000 renters state-wide.
Environment Victoria's Nicholas Aberle said the "unprecedented" investment would benefit hundreds of thousands of Victorians, making their homes both cheaper and cleaner to run.
"By international standards, Australia is way behind on household energy performance. Many of our homes are glorified tents, freezing in winter and sweltering in summer," Dr Aberle said.
He said more people die in Victoria from living in cold homes than in Sweden, while the heatwave before Black Saturday in 2009 was responsible for more deaths than the fires themselves.
Climate Council CEO Amanda McKenzie described the package as a "smart investment which will be critical to improving the health of Victorians, generating thousands of jobs and tackling climate change".
An analysis by the organisation found 20,000 direct jobs could be created in Victoria over the next three years by investing in energy efficiency, rapidly getting people back to work while also tackling climate change.
The state's opposition, however, said the government "hasn't gone far enough" with the $250 payment.
"We would've liked to have seen a $1000 concession for this year but every little bit helps," Opposition Leader Michael O'Brien said.