The indirect energy gap (Γ−X) is calculated using density functional theory (DFT) of the full potential-linearized augmented plane wave (FP-LAPW) method as implemented in WIEN2K code. The Engel–Vosko generalized gradient approximation (EV-GGA) formalism is used to optimize the corresponding potential for energetic transition and optical properties calculations of CdS1−xTex alloys as a function of quantum dot diameter and is used to test the validity of our model of quantum dot potential. The refractive index and optical dielectric constant are investigated to explore best applications for solar cells.