A bill to amend the Internal Revenue Code of 1954 to encourage greater use of insulation and to promote the development of solar and geothermal energy.

Allows a refundable income tax credit for 30 percent of the expenditures not exceeding $750 which the taxpayer paid or incurred during the taxable year for the installation of insulation in his principal residence. Limits the application of this credit to expenditures paid or incurred for installations made before 1980.

Allows a refundable income tax credit for 40 percent of the first $1,000, and a secondary credit for 25 percent of the next $6,400 paid or incurred by the taxpayer during the taxable year for the installation of qualified solar and geothermal energy equipment in his principal residence.

Reduces these limitations in subsequent tax years by subtracting the amounts taken into account for these credit in previous tax years. Limits this credit to equipment installed before 1982 in the case of solar, geothermal or wind energy equipment.

Prorates each of the above credits for residential improvements among joint owners and cooperative shareholders according to their proportionate interests in the residential property.

Allows an investment tax credit for 20 percent of the qualified investment cost of depreciable geothermal and solar energy equipment placed in service before 1982. Allows such a credit for 10 percent of the qualified costs of insulation placed in service before 1982.