Yes. The credit will reduce the tax on your return so you will get back more refund. So if your tax on line 22 is 10,000 and you have a 3,200 credit the tax will be $6,800. Then you will get more of your withholding back.
Don't change your withholding. It's not whether you get a refund or a tax due. And the withholding and estimated payments doesn't matter. It's if you have a tax liability on your income. Look at your 1040 line 22 for total tax. So as long as Line 22 is more than the credit, you'll get the whole credit.
The Solar Credit is a nonrefundable credit. It goes on Schedule 3 line 5a which goes to 1040 line 20. It can only reduce the tax liability on 1040 line 22 to zero. The rest will carryover to next year. Then you will get back all your withholding and any refundable credits. But it doesn't reduce any other taxes on line 23 like self employment tax or a 10% early withdrawal penalty on IRAs.
