Wikipedia is your friend.
Since signals may travel outside the user's residence or business and be eavesdropped on, HomePlug includes the ability to set an encryption password. The HomePlug specification requires that all devices are set to a default out-of-box password — although a common one. Users should change this password. On many new powerline adapters that come as a boxed pair, a unique security key has already been established and the user does not need to change the password, unless using these with existing powerline adapters, or adding new adapters. Some manufacturers supply adapters with security key buttons on them, allowing users to easily set unique security keys by plugging each unit in one at a time and pressing the button on the front (see more detailed instructions that come with the units).
To simplify the process of configuring passwords on a HomePlug network, each device has a built-in master password, chosen at random by the manufacturer and hard-wired into the device, which is used only for setting the encryption passwords. A printed label on the device lists its master password.
The data at either end (Ethernet side) of the HomePlug link is not encrypted (unless an encrypted higher-layer protocol such as TLS or IPsec is being used), only the link between HomePlug devices is encrypted. The HomePlug AV standard uses 128-bit AES, while the older versions use the less secure DES.
A Homeplug FAQ says
Is HomePlug secure?
Yes it is preset with its own 56bit encryption system to protect your data. HomePlug AV adopts a 128bit encryption system.
Don’t forget to check the security options on any wireless devices in the house. If an outsider can access the wireless network, they also gain access to the homeplug-connected computers, and the homeplug security is useless.
Can my neighbour steal my internet connection if he has a HomePlug?
No, the electricity meter acts as block on the signals that are transmitted across the network, so there is no chance of them leaking out on to the public wiring and your neighbours picking them up.
Don’t forget to check the security options on any wireless devices in the house. If an outsider can access the wireless network, they also gain access to the homeplug-connected computers, and the homeplug security is useless.