Deductions & credits

What you had withheld is immaterial to this discussion ... the solar credit is limited to your federal tax liability. So it reduces your tax liability which in turn COULD increase your refund depending on other items on the return. 

If the credit is larger than your tax liability AFTER other non refundable credits  then the unused portion is carried forward to the next tax year.  

Look at these 1040 forms ... one where you can use the entire $2600 credit and one where you can only use $2000 and carry the $600 balance.