Line #2 should be what you owe for income taxes to NM before applying the Solar credit.
Line #3 is how much of your solar credit do you want to apply to the amount on Line 2. If you credit is high enough to cover all of the amount in line 2 you should apply that amount. In other words line 2 and 2 would have the same value. IF you have Solar Credit left over you can roll that over to next year.
