A.Paul Eldrenkamp, owner of Byggmeister, a custom remodeling firm in Newton, Mass., responds: That depends partly on the thickness of the foam. If it's 1 1/2 inches or less, we apply Cedar Breather over the taped foam to provide back venting, and fasten the shingles to the structural sheathing beneath with 2 1/2- or 3-inch stainless steel nails. That approach has worked fine in our area, but we aren't subject to big wind loads. If you're not comfortable using the surface of the foam as the drainage plane, you could apply housewrap or asphalt felt under the Cedar Breather.
If you're adding 2 inches of foam or more, the easiest option is to use cedar-shingle panels, which consist of shingles laminated to a plywood backing. They can be applied over vertical battens, just like back-vented clapboards. Despite the premium pricing for the panels, this may be the most cost-effective strategy when labor costs are factored...
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