Homeowners are being offered cheap loans to entice them to make their homes more energy efficient.

The Federal Government will lend money to those who want to improve their energy efficiency by doing things such as installing solar panels or upgrading their water heaters.

It has allocated $1.3 billion towards the Household Energy Upgrades Fund which it hopes will help 110,000 households lower their energy bills.

The fund will also improve energy efficiency in social housing. With about 60,000 social housing properties expected to save up to one-third of their energy costs annually.

The Property Council of Australia says the move will help slash energy bills and help move Australia closer to its net zero goal.

Treasurer Jim Chalmers says the aim is to make sure energy bills are more affordable in the future.

The loans will help fund double glazing, solar panels and other improvements which will make it cheaper to cool or heat homes and reduce emissions.