I usually overpay in taxes and get about a $3000 refund. How would the tax credit impact this? What you "usually" get in a refund is immaterial ... the credit reduces your tax liability. Depending on what "payments" you made to cover this tax liability will determine how much of a refund of that over withholding you will get. So in theory your refund will go up because your tax bill went down but review your return to be sure. Be very aware that contracts for solar can sometimes be written so that your credit needs to be used to reduce your payment but if you only have $4000 withheld then that is the most the refund can be for 2022 which is not the full amount of $8500 that you were told you would get ... it could take more than one tax year to use up the credit in full.
Would it be better to change my tax status and not get a refund and then do the solar panels? That is totally up to you however if you change your withholding and forget to change it back later it could have unwanted consequenses in underwithholding penalties and owing the IRS.
