Energy levels refer to the specific amounts of energy that electrons can have when they orbit around the nucleus of an atom. Each energy level is like a staircase, where electrons can only exist on certain steps, not in between. The closer an electron is to the nucleus, the lower its energy level, while those further away have higher energy levels. When an electron absorbs energy, it can jump to a higher energy level, a process called excitation. Conversely, when it loses energy, it falls back to a lower level, often releasing energy in the form of light, which is how we see colors in things like neon signs or fireworks.