The environmental scrooge would say don’t put out any Christmas lights. They just add to the electricity load which adds needless global warming CO2 to the atmosphere if your power comes from a coal or gas fired power plant.
However, the pragmatic environmentalist says, lights are part of the holiday spirit. It alright to put them up. Its even important if you have little children. Just use a little common sense to reduce energy consumption.
The first thing to do is be a lazy environmentalist like me. It takes time and effort on my part to put the lights up and take them down. So, I feel a small display is best. You don’t need to try and out do the neighbors. There is no need to have lights on every square inch of your yard and house. My advice is small, simple and elegant. Its just less work.
The next thing to do use LED lights. They use 80 to 90% less energy than traditional Christmas lights.
Finally, use a timer. There is no need to have lights on all night. I usually set my lights to goes off somewhere between 10 and 11pm. I see many of my neighbors burning their outdoor lights all night. Using a timer is also the lazy environmentalist thing to do. You don’t have to make the effort to turn them on in the evening and off again before you go to bed. Also, you don’t need to go outside in the cold and snow just to turn off the lights.
So use some common sense and be lazy. This will minimize your Christmas light energy use and has the side benefit of reducing your electric bill.