The Department of Energy yesterday proposed reducing the scope of its residential energy conservation program to the minimum required by Congress and transferring to the states more responsibility in directing utility companies' efforts to promote conservation.

The same Federal Register proposal reiterated the Reagan administration's belief that the Residential Conservation Service (RCS) should be shut down because "private firms, utilities and other nongovernmental institutions now have sufficient incentive to provide the services. . . "

But congressional allies of the beleaguered service seem about to prevail: yesterday the House approved a conference report including a $3.5 million appropriation for the RCS. Senate action is expected soon.

During the Carter administration, Energy published an analysis estimating that the five-year cost of an ambitious residential energy-saving program would be $4.9 billion and the 20-year benefit would be $16 billion. The Reagan administration is is expected to say that costs, which would be borne mostly by the utilities and the state governments, outweigh benefits.

The new proposals include the congressional requirement that utilities offer home "energy audits" showing customers how to reduce fuel use, but the rules governing these audits have been relaxed as much as possible.

The proposed changes include:

* Giving the states power to set standards for energy conservation materials, such as insulation, to establish inspection and installation requirements.

* Eliminating both the training requirements for the utilities' auditors and the requirement that the results of an energy audit be presented in person.

Comments on the proposal are due Jan. 11.