What are some incentives that can be authorized by the U.S. government that would promote the use of renewable energy for low and middle income families? What kinds of renewable energy are most suitable for lowering household energy costs and most reliable?
There are a number of federal and state incentives that are currently available to U.S. families. Unfortunately there is not a national program in place at this time and each state is different.
The basic federal incentive is a 30% ITC (investment tax credit) that is available for homeowners but it is limited to a maximum of $2,000, this applies to both solar photovolatics (PV) and domestic solar hot water systems. Each state is different, but as an example in New York (where I live) if you put in a PV system you will get back roughly ½ of the cost of the system. Unfortunately NY is one of the better states. (Note: the ITC will expire at the end of 2008, unless Congress passes an extension.)
For detailed information of what is available in each state and with the federal government, this website will tell you what incentives are available in your area.
In regard to your second question, the best “bang for your buck” in terms of lowering energy costs is making sure your home is well insulated (attic, walls, hot water tank and foundation) and that your doors and windows are not leaking energy. There are usually local and state programs where you can get an energy audit that will give you detailed answers to this question.
In terms of the best “bang for your buck” in the renewable energy area, a domestic solar hot water heater is the most cost effective use of solar in a retrofit situation. Solar hot water qualifies for tax credits and incentives and can payback in as little as 5 years depending on your hot water usage and how you heat your water (oil, gas or electric).