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Now's the time to invest in energy-efficient home improvements and take advantage of new federal tax credits. Tax credits are available for 30 percent of the cost of qualified windows, skylights, doors, insulation, water heaters or solar panels. Tax credits, unlike tax deductions, are as good as a rebate -- they come straight out of Line 46, the taxes you owe.

You may not be able to claim tax credits for energy efficiency improvements to your home on this year's return (unless you installed a geothermal heat pump, solar water heater, small wind energy systems or fuel cells) but this is a good time to consider making improvements in 2009 and 2010. The economic stimulus package restored and expanded tax credits for energy-efficient home improvements made in 2009 and 2010.

Why is the government so interested in your windows and insulation? Heating and cooling account for a whopping 40 percent of U.S. residential energy use. Poorly insulated homes, single-paned windows and old inefficient water heaters and boilers are wasting energy and money. By increasing our homes' energy efficiency we can save money, reduce the emissions that cause global warming and reduce the need for new power plants. Learn more about where you may be wasting energy (and money) in your home. Take the house tour.

Tax credits are available for 30 percent of the cost, up to $1,500, for qualified windows, skylights, doors, insulation, metal and asphalt roofs, HVAC, non-solar water heaters and biomass stoves. The credit is available for existing homes and it must be your primary residence. For windows, doors, insulation and roofs, the credit is only for the cost of materials, not installation.

There's no upper limit for geothermal heat pumps, solar panels, solar water heaters, small wind energy systems and fuel cells through 2016 for existing homes and new construction. And you can include the cost of installation when figuring your 30 percent tax credit for these as well as HVAC and biomass stoves.

In addition to the federal tax credit, you may also be eligible for rebates or other incentives from your state when you make energy-related improvements to your home. For state-by-state details, see http://www.dsireusa.org/ 

Not all Energy Star labeled products are eligible for the tax credit so choose carefully. Learn more about qualified products and credits on the Energy Star website. Check out IRS form 5695 to learn how to claim residential energy credits. Remember to keep your receipts and the Manufacturer Certification Statement. 

• Learn more about how you can save energy -- see what consumes the most energy in American homes and learn which simple steps will have the greatest impact on your energy bill. Take the house tour.

• Hire a professional energy auditor to evaluate your home. Your utility company may provide basic energy audits for free. You can also check Home Performance with Energy Star or the directory of the Residential Energy Services Network.

• Switching to solar power may not be as expensive as you think. Tax credits are available for 30 percent of the cost, including installation. Learn more about qualified products and credits on the Energy Star website.

Are you pouring money down the drain every time you turn on the hot water? Reduce your utility bills by  increasing your water heater's efficiency and reducing the amount of hot water you use. In most homes, heating water consumes as much energy as lighting. Here are four basic things you can do to save energy and money.

By replacing old showerheads with new water-saving designs you can save energy without shortening your shower. Low-flow showerhead models use an average of 2.5 gallons per minute compared to the 5 to 7 gallons used by a conventional showerhead.

Install a low-flow aerator on your kitchen faucet. Most aerators include spray settings that making washing easier and more efficient.

Don't turn the hot water knob on your faucet unless you actually want hot water.  If you turn it on to wash your hands but your system is slow in getting the hot water to the faucet, then you have just wasted money to heat your pipes.

Set your water heater to 120 degrees. That should provide most households with enough warm water for showering and washing. If you live alone, you can set it lower -- each 10 degree reduction in water temperature can save between 3 and 5 percent of your water heating costs. When you are going away on vacation, turn the thermostat down to the lowest possible setting.

Insulating your hot water pipes will keep water hot as it flows through the pipes to your faucet and the water will stay warmer in the pipes. Even when pipes are insulated, the water in the pipes will cool but by staying warmer longer it'll save energy and water. It's easy to insulate the first 6 to10 feet of hot water supply pipe from the water heater. Pipe insulation is available at any hardware store.

An easy do-it-yourself project that should offer an immediate payoff in lower bills is to insulate your water heater. Particularly if your heater is in an unheated part of the house, a fitted water heater blanket can pay for itself quickly.

How much energy could be saved by more efficient lighting? If you're among the millions of Americans who switched to CFLs, you've seen the difference in your electricity bill. But how much energy could be saved with better federal efficiency standards? The numbers are staggering -- a higher standard for just two kinds of bulbs found in offices and homes could save 15.8 quadrillion BTUs of energy by 2048. A quadrillion is one thousand million million -- that's 15 zeros.

Slightly higher standards than the ones proposed could save an additional 6.2 quadrillion BTUs of energy and save consumers $25.6 billion dollars by 2048. And any reduction in energy use reduces emissions of CO2, NOx and mercury, in this case by 290 million metric tons, 461 kilotons and 2.4 tons, respectively.

Many Americans have already done their part by switching to more efficient lighting at home, tossing out incandescent bulbs and replacing them with CFLs. Now it's time for the government to make sure the lighting industry is making the best, most efficient products for all consumers.

Take a look at the lighting in your office and home and see if you're using these older, inefficient bulbs. BR type bulbs, with a slight bulge designed to focus light where needed, are exempt from efficiency standards. You might find these bulbs in recessed ceiling lights or outdoor spotlights. The truth is CFLs work well in these sockets and you don't need these specialty lights wasting your money. Not all fluorescent tube lamps are efficient, older T12 bulbs use much more energy than T8 or T5 bulbs. Its easy to tell, T12s have a diameter of 1.5 inches (12/8), while T8 are an inch around and T5s are 5/8s of an inch around.

• Take a look at the lighting in your office and home and see if you're using older, inefficient bulbs. BR type bulbs, with a slight bulge designed to focus light where needed, are exempt from efficiency standards.

• After you've replaced incandescent bulbs with CFLs in your home and office, consider replacing older specialty lighting with new lamps. You don't even have to remove the old fixtures, just add another, more efficient light source.

Compact fluorescent light bulbs aren't the only option for conscious, energy efficient lighting. LED, which stands for light-emitting diodes, are small and incredibly durable. Buy one now and you may not have to replace it until 2028. LEDs last up to 60,000 hours -- five times longer than compact fluorescents and 50 to 60 times the lifespan of an incandescent bulb. They use so little energy that some don't have to be plugged in at all, running on solar power or a single battery.

You already have LEDs in your home -- the little glowing lights on all your electronics. But now these tiny, bright lights can be found in modern lamps, chandeliers and sconces as well as crank flashlights and strings of holiday lights.

LEDs burn bright and cool for great decorative and accent lighting. They work well with shades, glass or other coverings to diffuse the bright light. Designers are creating futuristic, original lighting using LEDs. This very modern constellation chandelier uses clusters of LED lights suspended from copper tubes.

IKEA and Target both carry less expensive LED lamps. The IKEA Jansjo model comes as a $70 floor lamp, a $30 table lamp and a $30 wall lamp - each includes an LED bulb. Target carries a variety of sleek desk and floor lamps. And Energizer has started selling battery-powered LED nightlights, desk lamps and $45 wall sconces that you can hang anywhere without the help of an electrician.

This color-changing LED bulb comes with a remote control that allows you to adjust the hue to your mood. It can even work as a strobe light if you want to liven up a Tuesday evening at home.

For even more eco-friendly mood lighting, try LED wax-free candles. They look like votive or tea lights but it's actually an LED. These solar-powered sun and moon jars make great night lights for kids.

Solar-powered LED garden lights are available at most home and garden stores. A small solar panel charges the lights during the day and powers them through the night.

For the holidays, decorate with LED bulbs instead of standard incandescent bulbs. LED holiday lights are 90 percent more efficient than regular bulbs. Though a string of LED lights costs a bit more, it will last 20 years and is difficult to break. LED strings come in all shapes and colors and are incredibly efficient - so you can light up your yard without fear of the electricity bill.

Isn't that illuminating?

• Replace your clunky battery-powered flashlight with a crank LED flashlight and you'll always be ready when the lights go out. Crank the handle for a minute and the flashlight will light up for a half hour. Some crank flashlights can even charge your cell phone too.

• Visit a lighting store to take a look at LED lamps and solar-powered lighting. These energy-efficient, long-lasting lights are worth the investment

• Replace outdoor lights with solar-powered LEDs.

They may not be high-tech, but ceiling fans are an energy efficient way to regulate the temperature of your home and reduce your energy bill. Heating and cooling are responsible for 40 percent of all residential energy consumption. Reduce the amount of energy it takes to a keep your home comfortable by installing a few fans -- they'll keep you cool in the summer and help circulate warm air in the winter.

In the summer, the breeze of a counter-clockwise ceiling fan will make you feel cooler and in the winter the direction of the fan can be changed to clockwise to efficiently circulate warm air. 

In the summer, place fans around your home or install ceiling fans in the rooms you use the most. The breeze will make you feel cooler and you can comfortably raise the thermostat on your air conditioner. Remember to turn off fans in empty rooms, fans makes you feel cooler but don't lower the temperature of the room.

A large fan in the top-floor of your home can effectively and efficiently cool your entire house without central AC. A fan will increase air flow through the house, pulling in air from rooms with open windows and creating a strong, cooling draft throughout the house. Visit your local hardware or home improvement store to learn about products and installation.