The way it was explained to me today by a solar salesman is that the 30% credit is credited toward your tax liability, but only up to your taxable amount each year. Here's an Example (plug in your own numbers):
Your solar system costs $20,000. 30% of that is $6,000 - this is your total tax credit.
Let's say your Tax ends up being $4,000 for the year that your solar was installed, but $4,500 was withheld (leaving you with a refund of $500).
You can only take up to your $4,000 tax liability as a solar credit in your first year, because you cannot use more of the credit than what you owe in taxes. so the remaining $2,000 will be used as a credit next year.
On your Form 1040, Line 44/Line 47 Tax = $4,000
Line 53 Residential energy credits, enter only up to your Tax amount on Line 47 = $4,000
Subtract Line 53 from Line 47 = $0.00
Assuming there are no other entries between Line 47 and Line 62, enter $0.00 on Line 63 - This is your Total Tax.
Enter the Federal income tax withheld on Line 64, which in this example is $4,500.
$4,500 will be your total refund ($4,000 from your energy credit and $500 excess withhold - which would have been your refund amount without the energy tax credit).
And, next year, you will enter the remaining $2,000 energy credit on Line 53.
SWEET! That is, if the energy tax credits are still available for 2018 and after. I can't find anything on this so far.
