Victorians will be able to install solar panels on their homes for half price under a $1.24 billion scheme announced by the Andrews Government.

Key points: Solar panels to be installed in more than 650,000 Victorian homes.

Solar panels to be installed in more than 650,000 Victorian homes. The scheme is open to homes valued under $3 million.

The scheme is open to homes valued under $3 million. Households have been promised up to $890 savings a year on power bills.

The State Government said from Sunday it would pay $4,550 upfront to install the rooftop panels, and households would then be required to repay half the cost over a four-year period.

The Solar Homes scheme is available to owner-occupied homes valued at less than $3 million, with a combined household income of less than $180,000.

Under the plan, solar panels would be installed on 650,000 homes over 10 years.

Premier Daniel Andrews said it would help thousands of households save up to $890 dollars a year on their power bills.

"We were promised that privatisation would lead to lower prices, that simply hasn't happened, every household can tell you that," he said.

"Now we have a plan for the future that's practical, based on common sense that will happen."

The scheme would save the average Victorian household up to $2,225 for the installation of an average 4kW solar system.

The Andrews Government has promised if it is re-elected the scheme would be expanded from July next year to allow homeowners to repay the loan interest free.

An independent agency called Solar Victoria will also be set up to oversee the scheme to ensure the safety of solar panel installation.

The Government has also promised to invest $9 million for the accreditation of 4,500 electricians to install the panels.

Environment Victoria chief executive Mark Wakeham welcomed the announcement "after years of tedious energy debates in Australia".

"Victorians will now be able to take control of their power bills. Every Victorian homeowner who wants solar power will be able to afford it under this plan," he said.

"Adding an extra 2,000 megawatts of solar beyond what was expected to happen will lower energy bills for all Victorian households and businesses by pushing new clean energy into the power grid."

Opposition spokesman David Southwick said the solar panel plan seemed like a thought bubble.

"What we have today is an announcement where we are just going to splash cash without any real thought of how this will work back into the market, with no consumer protection in place."