A solar credit is a nonrefundable credit. That means if there is no tax liability there is no credit. The good news is you can carryforward the credit as long as the credit is available. Your question about creating a liability to take advantage of the credit. By cashing in a 401 K you will pay both tax and a 10% penalty. You can use the credit to offset the income tax but not the 10% penalty on the amount withdrawn.
