Named Arbed - the Welsh word for "save" - the scheme has been allocated £30 million of funding and could help people in at least 21 communities in the country.
By upgrading the energy efficiency of housing in some of the most deprived parts of the country, the programme is intended to boost employment, skills and regeneration.
Arbed aims to reduce carbon emissions and energy bills in 6,000 homes by March 2011. Through offering contract to local companies and creating new jobs and training opportunities, it is intended to stimulate the economy and cultivate an energy efficiency and renewable energy industry in the nation.
Those companies who win bids for work through Arbed funding would be required to employ staff from the local area and arrange 156 training days for every £1 million of government support they receive.
Wales' Energy Policy Statement states that the country's leaders will make efforts to maximise energy efficiency so that generating the majority of its required power from low-carbon sources can become more feasible and less expensive.
Written by Charlie Parkin.