The Energy Efficiency and Conservation Authority (EECA) offered a range of government subsidies for different groups to make homes more energy-efficient.
Traditionally, there had been little interest in the branch of the programme which offered landlords with low-income tenants subsidies to improve their properties, a spokeswoman said.
However, when the Government increased funding in November, "they got really interested", she said.
Now, instead of a 25% government subsidy, landlords could receive a subsidy of 60% for insulation, clean heat and other energy efficiency measures such as draught-proofing.
Landlords would have to pay a minimum of $500 towards costs.
Since July 2007, 1284 rental houses had been retrofitted, 63 of those in Otago, with more in the pipeline.
Dunedin landlord Grant Roydhouse had been in the property market for 10 years and owned "a few" rental properties in the student area.
He had planned to do some work on one of his flats and decided to get involved with the "experts" at Eco Insulation, the sole provider for the programme in Otago, as they would know which changes would provide the most benefit, he said.
He knew his property would become more desirable to tenants if it was warm and energy-efficient.
"The tenants receive the benefits with healthy living and cheaper power bills," he said.
Underfloor and ceiling insulation was installed, along with a moisture barrier under the house to stop rising damp.
Mr Roydhouse described the system as "user-friendly" and said he would look into getting more grants for his other rental properties.
Eco Insulation had been "inundated with inquiries and questions" since the subsidy was increased, accountant Leanne Sowry said.
Other branches of the Energywise scheme had also received more interest lately.
Its low-income homeowners branch, launched in 2006, had retrofitted nearly 48,000 homes nationally, including 2118 in Otago.
In 2007, EECA targeted middle-income homeowners with funding.
These grants had initially "been slow to pick up", with only 304 grants issued before last November, a spokeswoman said.
To address this, the organisation relaxed the programme requirements and increased the funding available.
In the two months following, the figure rose to 498, with 18 of those in Otago.
A marketing push last year also "generated huge interest", with about 4000 requests for information received, she said.
"It's a bit of a success story."
For more information, visit the Energywise website www.energywise.org.nz or phone 0800 749-782.
