The initiative, which launched in January last year, allows people to borrow money towards improvements such as installing double-glazing, insulation and more efficient boilers.

Household pay back the cost of the improvements over time through their utility bill. Ministers say the savings households make on energy bills should cover the expense of repayments.

Under changes announced today, households will be able to borrow up to £4,000 for solid wall insulation, up from £650 and up to £1,000 for roof insulation, increased from £220. They will also be able to borrow £650 for installing double glazing, from £320.

The Department for Energy and Climate Change (DECC) is also extending the scheme. Applications for Green Deal cash-back can now be submitted up to the end of June, with a further three months for households to install energy efficiency measures and redeem cash-back vouchers, giving them more time to take advantage of the scheme.

The number of households applying for Green Deal assessments – the first step in the Green Deal process – fell 21% in Decmber, compared with the previous month, to just over 12,000, according to official figures.

Energy and Climate Change Minister Greg Barker said: “Inefficient homes use a lot more energy than they need to, which consumers pay a high price for.

“The extension and increase to Green Deal cash-back means more families will be helped to have warmer, more energy efficient homes and lower energy bills by next winter. These changes also create more opportunities for the growing number of authorised green deal companies.”

The DECC has also raised the cap on cash-back payments from 50% of a household’s contribution towards costs, to two thirds, meaning more people will be eligible for the maximum cash-back level.