I have seen numerous discussions regarding the use of solar panels that generate excess power which is returned to the grid. The questions being asked is if this qualifies as a business and if so can the solar equipment be depreciated. In some of the posts multiple "experts" offer differing opinions.
So, here it is again. I have a $50,000 solar panel system installed on my residence. The system is constructed with the intent of not only powering the home but also generating excess power above and beyond what the residence requires. This excess power is measured via net metering and returned to the grid. The home owner is compensated by the utility provider for the excess power generated which they then use to power other people's homes/businesses. The compensation is in the form of bill credits. 1 kWh credit for every excess kWh. This is paid by the utility provider. As of now, there are no cash payments to the owner, only bill credits. The credits can be used to offset any future electric charges incurred (i.e. during a month of cloudy weather for instance).
Does this qualify as a business and if so can the solar panels be depreciated?
If the owner is also an independent contractor (real estate agent for example) who operates their business within the same residence, does this change things?
