I think they'd have to majorly undercut the other suppliers to gain a lot of customers due to the bad (self) publicity of Musk. Also, Tesla are not known for good customer service, though there's plenty of examples of poor customer service amongst the gas and electric suppliers.
Tesla already buys wholesale electricity for it's charging network and so is leveraging that and it's brand/customer database to diversify and enter the reliable revenue stream that is domestic utility bills?
Perhaps Tesla share price isn't that silly if they are going to be so innovative in their thinking.