The energy efficiency of a home relies on several factors. 

The most dominant of these factors is the insulation used, both within the perimeter walls and attic.  This would include the houses ability to breath as well as maintain a good barrier.  It's not so much the amount of insulation as the type and installation methods.

Another factor that effects the energy efficiency of your home is your windows and doors.  They come in all varieties of energy ratings, and are also reliant on the installation methods used.

The third thing that I would look at is the ventilation of your attic.  If your attic has the necessary ventilation needed it can reduce energy cost as well as prolong the life of your roof system.

Great insulation plays a key factor in energy savings. There are many different options available to increase the energy efficiency of your home.  James Hardie Siding is specifically designed for the climate in which it is installed. Whether you live in a climate with freezing temperatures, snow & ice or a climate with high humidity, heat, and rain; James Hardie has a siding product built for your homes specific needs. Technology has changed tremendously over the years so homes built 15- 20 years ago may have been installed with what was considered cutting edge at the time. Window replacement and the new technology that windows have now can save a great deal of energy costs. A good product that we can recommend also would be the Mezzo Vinyl Window or Integrity by Marvin Windows. These are high performance windows that are engineered to provide outstanding energy efficiency. Major appliances such as heating and A/C units can also offer great energy savings. 

Oftentimes the attic is the place to start.  Make sure you have plenty of ventilation, both intake and exhaust.  Check the soffit cavity to make sure you it isn't clogged with insulation.  There are formulas for Square foot of attic in relation to ventilation.  If you have a vapor barrier in the ceilling a ration of 1:300 sf is ok, otherwise about 1:150 is the rule. Second, check the insulation.  All air escaping into the attic should be sealed using spray foam or other sealants. Next, depending on your geographic location, make sure you have plenty of insulation in the attic.  Finally, something as simple as installing blinds over windows can be an economical solution to saving on energy costs.  As recommended in some of the other answers, an energy audit or getting advice from any number of qualified professionals that are willing to visit your home is the best place to start.

John Ford, There are an abundance of energy efficiency upgrades you can do to your 2-story home. A question to your question - do you have a small or a larger budget? Small budget - 2 options: Attic Insulation or A Foil Energy Barrier, one example is Green Energy Barrier. Blown-In Attic Insulation is inexpensive and can help with an additional R-value of 18-60 in your attic. A Foil Energy Barrier - can be placed along the rafters or floor boards and is a foil used by NASA that greatly assists with energy efficiency. Larger budget - 3 solid options: Solar panels, Replacement Windows with Krypton gas, or Insulated Siding, an insulation with a system R-value of a 4.2 that contours to your siding panel. Best, Ken 

Before you do anything new...look at what is already there. 

1. Do the existing windows allow drafts?  Upgrade existing windows first before considering new windows.  I don't think the payback is that great over existing windows that are properly maintained. 

2. Is the header serviced annually?  Change the filter monthly (there are so cheap), check all the ducts for breaks and tape them up.  Walk around the house when the heater(s) are on and check the temperatur in each room.  When you have done your homework then have a profeswsional come in.

3. Seal around the ceiling can lights on the second floor that are allowing heater air into the attic. 

4. Replace the seal around all your exterior doors.  This is really the case on the door from the garage to the house. 

Start there \Philp Anderson HDR Remodeling Berkeley CA

Many great answers here regarding insulation and air sealing.  If you have a pool, also look into upgrading your pump to a variable speed pump.  They run at lower RPM for filtering than they do for vacuuming.  This can be a significant saver in energy costs... and as always, GO SOLAR!

Solare Energy has been serving San Diego for 25 years and provides our customers with a free energy audit and rate analysis before designing a solar panel system for their homes.  This allows us to accurately size the system to your energy consumption needs and get you the best value for your investment.

Learn more at www.SolareEnergy.com or call 858-547-4300 for San Diego area solar installations.

Rob Shaw
Marketing Manager
Solare Energy, Inc.
San Diego, CA

Currrently, you can receive a federal tax credit for 30% of system and installation costs.

In California, the state rebate incentive has been exhausted and is no longer available.

Typically, the price of your system should depend on how many panels you are having installed.  It is recommended to get a few competitive quotes and always check the reputation of the installers.

Learn more at http://solareenergy.com/pricing/.  This includes some sample pricing information and can help you get a better idea.  Average system size is about 5.5kW and should cost somewhere in the ballpark of $20,000.  This would give you to a $6,000 federal tax credit.

Solare Energy has been serving San Diego for 25 years and provides our customers with a free energy audit and rate analysis before designing a solar panel system for their homes.  This allows us to accurately size the system to your energy consumption needs and get you the best value for your investment.

Learn more at www.SolareEnergy.com or call 858-547-4300 for San Diego area solar installations.

Rob Shaw
Marketing Manager
Solare Energy, Inc.
San Diego, CA

I say insulation should be at the top of your list. I would also take a look at your water pumps.

Here's a few of the items we actuallyp ersonally suggest when going green: http://xtremegreenhomes.com/green_options.php.

We have written on good bit on this subject: Please take a look at these blogs we wrote!

http://blog.akatlanta.com/2010/11/10-mistakes-not-to-make-when-heating.html

http://blog.akatlanta.com/2010/11/7-winterization-tips-to-keep-your-money.html

I have yet to survey a home that didn't need additional insulation and more importantly....air sealing. 

While HVAC systems are typically older in most homes that we audit, every home that I have ever been in leaks too much air and much, much more than is required.

Air Sealing and Insulation would be #1 and #2 on my list.  After that, items like HVAC and windows will jockey for position depending on the condition of both. 

Here's the scoop:

It all depends on your usage and how much room you have for panels, but we routinely knock out 100% of our clients' electricity bills.

However, the system will almost certainly be what we call "grid-tied", meaning that you will still be connected to your utility. This is important as solar tends not to work so well at night. So what will happen is you will produce more during the day than you need, pouring the extra power back into your utility and running up a credit, essentially using the utility like a "power bank". You then pull power from the "bank" at night. Note that this may happen on a daily level, or over the year, with your system producing a net surplus some months, and using that surplus in months where production is less.

The upshot is that, while your net consumption of power from your utility over the year may be zero (or close to zero), you will still "need...power from your local power company" in order to compensate for variances in solar production.

In addition, different financing methods may work best with different production goals, due to the way your utility prices the power you use, i.e. in a tier structure, versus how your solar is financed. This is a bit more complicated, but I'd be happy to walk you through it if you want to give me a call - John Cook, (888) 603-4255.

I hope that wasn't too technical or convoluted, but I wanted to make sure you had the facts. Good luck!

While adding PV panels is a noble endeavor, it is unlikely to produce more than about one third of your annual electrical requirements.  Less than that, if you have air conditioning, even in a newly built, energy efficient home.  The financial savings, though, will continue to climb over time, as more dams and coal power are elliminated, and the cost of generation climbs steeply.  The payback time will shorten, and the lifecycle of the panels will net a return toward the rest of the power you use.