The IRS says, "A trade or business is generally an activity carried on for a livelihood or in good faith to make a ..."
But people don't add solar panels in order to earn a profit, but to reduce monthly electric bills, and if these bills are negative in some months such that the homeowner gets a rebate, so much the better.
But if the solar panels lost money every month, would the homeowner tear the panels out? Almost certainly not, because they were not installed for a profit motive in the first place.
Cover your backyard with dozens or hundreds of panels so that you always sell power back to the utility, well, you could make the argument that THAT is a business and business assets can be depreciated. But I doubt very much that the IRS would buy your argument for depreciating the solar panels on your house - and the amount you would save would not be worth the hassle if audited.
P.S., any depreciation reduces the basis of your home, so that when you sell the home, your gain is increased...and worse, the depreciation must be recaptured as ordinary income (i.e., not covered by the $250k/$500k exclusion).
@Tom188
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