Southern China, by contrast, has some central heating systems for industrial use but few for residences.

"Residents need to pay a little or no cost at all for the change," Qiu Baoxing, a vice minister of the Ministry of Construction, told a press conference in Beijing.

"Energy companies will be invited to do the revamping and bear the costs, and then they will be reimbursed by heating fees saved because of the change during a period of time," Qiu said.

He said China will launch an energy efficiency labelling system this year to identify energy-saving levels in buildings.

"With nearly half the world's construction activity in China, the market for energy-saving is very large," said Qiu.

As of October 2007, 97 percent of the designs of new buildings in cities and towns had adopted national energy-saving standards, while 71 percent of buildings under construction met requirements, up 1 percent and 17 percent respectively from the period a year earlier, according to Qiu.

The construction ministry will also overhaul 150 million square metres of buildings in northern China to increase energy-savings, part of a national plan to improve energy efficiency and reduce greenhouse gas emissions. He did not disclose when the change would be completed or how much it would cost.

Qiu said with the help of government incentives, 700 million square metres of buildings had been covered by solar energy at the end of 2007 and 80 million square metres by geothermal energy.

Fast economic development, coupled with low energy efficiency, has led to surging energy demand in the world's second largest user in recent years. Power and oil shortages happen from time to time despite rapid capacity expansion.

China had pledged to cut energy consumption per unit of GDP by 20 percent in the five year through 2010.