A bill to amend the Internal Revenue Code of 1954 to provide a tax credit for expenditures by a taxpayer for solar heating and cooling equipment installed in new or existing residential buildings, to provide a tax credit for expenditures by an individual for insulation in such individual's principal residence, and to make certain changes in the investment tax credit.

Allows, as a credit against the income tax, 25 percent of the expenditures paid between December 31, 1976, and January 1, 1982, for the installation of solar heating or cooling equipment in any residential building owned by the taxpayer and which is not used in a trade or business or held for the production of income. Limits the expenditure claimed by any taxpayer, for any building, to $8,000. Prorates the allowable credit among joint owners and tenant stockholders. Prohibits any increase in the structure's basis to the extent that this credit is claimed. Defines "solar heating and cooling equipment" as equipment meeting the criteria of the Solar Heating and Cooling Demonstration Act, with a useful life of at least three years, and which is originally used by the taxpayer.

Allows, as a credit against the income tax, 25 percent of the expenditures paid for insulating the taxpayer's residence between December 31, 1976, and January 1, 1979. Limits the expenditures claimed during this period to $1,000 for any individual or building. Prorates the allowable credit among joint owners and tenant stockholders. Prohibits any increase in the basis of such residence to the extent that this credit is taken. Applies these provisions to buildings in use as residences on January 1, 1977.

Allows an investment tax credit for expenditures paid or incurred after January 1, 1977, for insulation installed before January 1, 1979, and solar energy equipment installed before January 1, 1982, in structures used for a trade or business or held for the production of income. Extends this investment credit to structures used as lodging facilities. Directs the Secretary of the Treasury to draft additional criteria defining solar energy equipment for the purposes of the investment tax credit.