Literature ReviewFossil fuels are being consumed at a rapid pace which is not available infinitely. Moreover, they produce carbon as residue which is responsible for the climate change and global warming. This affects the crop production and causes ecological imbalance (Schneider et al.
, (2000). There is a need to use alternative energy resources. Solar energy can become the alternative as it is the cleanest form of energy. Also there is no requiremnt of any other natural resources to produce electricity. Although, fossil fuels produce large amount of electricity than solar panels, they have damaging effects on the environment.
Solar panels uses wavelength of the sunrays and convert them in electricity which is stored in batteries (Kumar M., et al. 2014). There has been a considerable increase in production of electricity through solar panels in previous years (gov.uk,2016).
Eventhough, the demand of solar panels are increasing, it is still away from the reach of general public. Solar panels are made of crystalline silicon which is a scarce resource and is expensive. Also, the electricity produced by the solar panels cannot be used at the same time. Lithium batteries are deployed for the storage of the electricity produced by the panels. Tesla also manufactures solar panels along with electric vehicles. There are many companies which are also producing solar panels and are already established in the market whereas Tesla is stepping in the market in 2018.
Tesla is providing its customers with the best in class solar panels but is charging a premium price for the panels which discourages the middle class people to buy solar panels for their homes.As global energy crisis is acknowledged by the population, people are becoming aware of the solar panels and are willing to install them in their houses as it helps them to save money in future. Moreover, governments are giving subsidies to the people to encourage them to choose solar panels. At present, it is a great opportunity for Tesla in deliver solar panels to its customers. Usually the life span of a solar panel is 5-7 years, but Tesla claims that its solar panel can last upto 30 years which can give a huge competitive advantage to Tesla. Although the company needs to find ways to reduce the cost of its solar panels so that it is used by majority of people.
For instance, if the cost involved in the installation of solar panels is double or even higher than the cost of traditional electrical systems, the general household will not invest in solar energy. Though it is a long term investment for their own benefit, it is still not preferable for short term. Moreover, solar panels are not fully efficient to produce electricity as they can produce electricity to some extent, but to generate sufficient amount of electricity, panels need to be installed in a large area which will increase the cost (Why Are Solar Panels Inefficient?, 2016). Tesla recently ackquired SolarCity which specializes in solar energy products.
If Tesla can develop low cost solar panels, it can become the market maker as price is the most valuable factor. Scientists have already been working in this direction to find a cheaper alternative to crystalline silicon and they invented perovskite which helps in increasing the efficiency of the solar panel and can be produced by commonly available elements such as lead, iodine, tin and cesium (Stanford, 2016).