1. Yes, you must file the form to claim the credit in the year the system is installed. If you can't use the credit, you still must file to document the credit and carry it forward. You need to go back and file an amended 2023 return to claim the system.
2. You claim the credit in 2023 when the property is installed. Converting to a rental in 2024 has no bearing on your eligibility in 2023.
Also, I suspect you misunderstand the nature of the credit. The credit is limited by your tax liability. That is not your refund, your tax liability is what the IRS gets to keep over the whole year after your return is finished. (Although income tax liability doesn't count self-employment tax or any penalties.) For example, if you had $6000 of withholding, and get a $1000 refund, your tax liability is $5000. In that situation, you would get up to $5000 as your solar credit, resulting in a refund of all your withholding. If the credit is larger, the rest carries forward.
