One of the country’s biggest unions says a federal government decision to redirect $45 million from an axing a solar hot water rebate scheme back into the industry will save jobs.

Climate change parliamentary secretary Mark Dreyfus on Wednesday announced $24 million would be spent on a new program to help local councils install solar or heat pump hot water systems in community facilities.

The remaining $21 million will be redirected to the existing home energy saver scheme (HESS) to help poor Australians buy hot water systems or more energy efficient products.

The decision comes four months after Labor immediately scrapped a government renewable energy bonus scheme, which gave applicants rebates of up to $1000 to install solar hot water systems.

At the time, local manufacturers Rheem and Dux said the sudden closure of the scheme could see the market halve and thousands of jobs lost, prompting the government to guarantee left over money would be used to support the industry.

Australian Manufacturing Workers Union NSW secretary Tim Ayres believes the government will no come good on that pledge.

“I’m confident there will some good local content provisions but we are going to have to work through the detail,” Mr Ayres told AAP on Wednesday.

“It’s always about the implementation.”

Mr Ayres also believes Wednesday’s announcement means local jobs will be saved.

“I don’t believe there will be job losses,” he said.

“This is a very significant subsidy and the industry has got a social obligation now to make sure they are delivering for local jobs and delivering for apprenticeships.”

The Australian Local Government Association said funding under the new local government energy efficiency program would be available from October and councils would have six months to complete projects.

It’s understood small and rural councils can apply for $25,000, medium and regional councils can apply for $40,000 and metropolitan and large regional councils can apply for $73,000.

The Australian Council of Social Services said the extra $21 million for the HESS program would help households better understand and manage energy use.

The $45 million includes left over funds from the $63.5 million budgeted in 2011/12 for the solar hot water initiative and some $24.5 million earmarked for 2012/13.

The five-year subsidy scheme always was scheduled to wind-up in mid-2012 but industry argued it was caught unaware – and with excess stock – by the February 28 deadline.

The Australian Greens claimed credit for forcing the government to spend the money on programs that would support the solar hot water industry.