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Beginning in 2006, homeowners can take advantage of incentives to make their homes energy efficient.
Tax credits are available for home energy efficiency, solar energy, passenger vehicles and fuel cells. The federal tax credits were origanlly in effect for work done between Jan. 1, 2006 and Dec. 31, 2007. On December 20th President Bush approved a bill on December 20th that will extend federal tax credits for renewable energy and energy efficiency projects. The wide-ranging Tax Relief and Health Care Act of 2006 extends the production tax credit through 2008 for electricity produced from wind power, geothermal power, biomass, landfill gas, small irrigation power, and trash combustion facilities. It provides a similar one-year tax credit extension for new properties that produce geothermal power or make use of solar energy; for homeowners that purchase solar water heating, solar photovoltaic, or fuel cell systems; for businesses that purchase fiber-optic lighting systems, solar energy systems, or fuel cell power plants; for new energy efficient homes; and for energy efficiency improvements to commercial buildings.
The act extends the Clean Renewable Energy Bonds program through 2008, and increases the total annual amount of tax-credit bonds to $1.2 billion. It extends special tax allowances for cellulosic ethanol facilities to include plants placed in service by 2012. It also extends the research and development tax credit, which encourages businesses to invest in new innovations.
According to the IRS, on the 1040 form, line 52 is the residential energy credit.
There's information on the 1040-ES about how to enter the proper info on the tax forms http://www.irs.gov/pub/irs-pdf/f1040ese.pdf
IRS Form 5695 should be used in conjunction with the 1040. Form 5695,
Other links that you may find helpful for general tax credit information include:
A new effort has been launched by our education partner, American Council for an Energy Efficient Economy (ACEEE), in collaboration with other groups to provide a quick reference tool for how these tax credits can benefit you. Visit the Tax Incentives Assistance Project (TIAP), website at EnergyTaxIncentives.org.
Efficiency Rebates. Check with your utility to see if they offer rebates for upgrading equipment, appliances, lighting or sealing air leaks in your home.
Solar Energy Rebates. Due to the passage of Amendment 37 in Colorado (2004), some utilities are offering significant rebates for solar electric (PV) systems. To learn what rebates are available in your area, visit your utility's website.
Xcel Energy Solar website
Colorado Springs Utilities Efficiency & Solar website
Smart Energy Living is offering workshops year-round that discuss installing energy effecient and solar measures, as well as the tax credits and rebates available. Visit our workshop page to register for an event convenient for your schedule. | 
