What is the impact of Tesla's solar tiles?
Tesla has developed solar panels which can be incorporated into roof tiles, their solar tiles are lighter in weight, cost approximately the same as a normal tile and have the additional benefit of generating free electricity. What is more interesting is that they last longer than traditional tiles and can survive hail storm. Tesla is looking to offer infinity warranty and expect the tiles to last longer than the house.
Now, let's analyse the impact on the economy and the society.
1) Traditional roofers/builders will be put out of business. Therefore, increasing unemployment in one sector however it will increase skilled employment, i.e. the new breed of engineers who install Tesla's solar tiles.
The traditional roofers will need to be re-trained so that they can be deployed elsewhere in the economy.
2) Would the National electricity grid still exist? Perhaps it will as a back-up, or their role may change whereby instead of producing electricity, they become the brokers; distributing energy where it is produced in excess to may be areas where there is a lot of shade?
Demand for Nuclear power stations, and coal power stations may not exist in the future. Energy from renewable sources will reduce negative externalities.
3) Some countries buy their energy from other countries. This will impact international trade, and certainly Balance of payments.
4) If the energy is available in abundance, it will create demand for new products, which in turn will increase employment. The increased demand will lead to inflation (demand pull inflation). Government may intervene and try to use fiscal and monetary policies to control inflation such as increase in interest rates or taxation.
5) Drop in taxation revenue may entice the Government to begin taxing solar energy.
6) Wastage of energy may increase if it is available for cheap and in abundance, this will increase negative externalities.
7) Micro-economics- cheaper energy will reduce businesses' cost, leading to economies of scale. This will increase their profits or the benefits may be passed onto the consumers, leading to lower price. Hence, leading to drop in inflation.
8) Reduction in poverty and inequality could follow, improving quality of life, which will have positive externalities. Access to hygienic life may become easier, leading to drop in disease and sickness, which will reduce National healthcare (NHS) cost for countries such as UK and Canada however it will also lead to a drop in demand for medication.