Deductions & credits

Did you only have $657 of income tax before the energy credit (look at lines 16 through 22 of your Form 1040)?  The credit is non-refundable, meaning that if your income tax is only $657, it can't give you credit of more than $657.

 

As a side note, unless your furnace or water heater is a "heat pump", the maximum credit is only $1200.  The extra $2000 is only for a "heat pump".