Question about energy tax credits

My partner and I own a home that was built in 1891. Over the years some additions and improvements were made, including the installation of storm windows. However, we're losing a ton of heat (and money) because the back of the house, which includes several rooms and a large kitchen, is uninsulated. The clapboard exterior was simply covered over with an old type of vinyl siding that has absolutely no insulating properties. We would like to have the old siding removed and replaced with a new siding that has the insulation "built in", so to speak. Would this qualify for an energy tax credit? If not, what would?

I've looked at some of the govt websites regarding energy tax credits and didn't see anything that might address our particular situation.

Thanks for any advice.

The major program just announced by Obama hasn't been formalized yet, so the details aren't clear. Most programs specify a certain level of insulation (R value) needs to be installed to qualify. Exterior insulation that I'm familiar with has an R value of between 1-3 while what goes between the walls ranges from around 13-19.

Is there some reason you are wanting to use insulated siding rather than insulation between the walls? Exterior is good, but you are going to get more bang for your buck by insulating between the walls. You might consider pricing blown insulation from a DIY supplier.

You can also get large sheets of 1/4" foam for exterior application under the siding you now have. It will smooth the surface under the siding and improve the appearance as well as reducing opportunities for drafts.

Eventually all of the crappy interior paneling placed over the plaster and lath should be replaced but we don't have the money for that right now. We are insulating between the walls as we gradually replace these interior panels but replacing them all and in the process installing insulation is simply beyond our means. It's because these interior wall panels all need to be replalced that we're shying away from blown insulation at this time.

But it seemed to me that they weren't specific about what exactly qualifies as "insulation" and whether insulated siding would meet their crietria.

http://www.irs.gov/publications/p17/ch37.html#en_US_publink1000174954

http://www.irs.gov/pub/irs-dft/f5695--dft.pdf