Pilot projects have already seen some homes refurbished with solar power
Plans to equip 40,000 homes with energy saving equipment aimed at cutting bills and creating jobs, have been unveiled by the assembly government.
The £12m programme is also designed to tackle child and fuel poverty in the Heads of the Valleys area.
Leighton Andrews, deputy minister for regeneration, said it was anticipated the 15 year initiative would attract millions of pounds of investment.
It is hoped the measures will make the area Europe's first low carbon zone.
The programme aims to install sustainable energy measures into 40,000 socially owned homes, have 65,000 homes assessed for energy efficiency and 39,000 energy reduction measures implemented.
It is hoped this will result in the reduction of domestic energy bills of £1.7m and reduce emissions of at least 139,200 tonnes of CO2 a year.
Mr Andrews said the programme was designed to tackle fuel poverty and create a new industry base in the region linked to job creation, skills development and the development of local businesses in the sector.
Details of the first round of investment and the first low carbon town will be unveiled in the New Year, he said.
"Energy costs have a disproportionate impact on household income in deprived areas and less money spent on fuel bills means more money available to spend in the local economy," said Mr Andrews.
A pilot project in Ebbw Vale saw the United Welsh Housing Association getting help from the programme to fund the installation of a range of measures to tackle carbon emissions in 28 new homes.
Exhaust air recovery heating, under floor heating, rainwater recycling and thermal water heating systems have been among the measures introduced.
The pilot will test the effectiveness of these systems.
Further projects have been undertaken with Rhondda Cynon Taf Homes and Bron Afron Homes to introduce energy-saving technologies including solar power during the refurbishment of existing homes.
Leighton Andrews said these projects formed part of the wider economic and social regeneration of the Heads of the Valleys region.
"They are taking forward several strands of our environmental theme with the ultimate aim of adding value to the fuel poverty and economic regeneration agendas," he said.
"These projects are leading the way in delivering a step change in the economy of the region."