Utilization of renewable energy technologies remains one of the major energy policies throughout the world. These technologies are proven to be successful for electrifying rural communities, especially in developing countries. Realizing the benefits of renewable energy sources, the Government of Nepal has initiated the production and distribution of renewable energy technologies in recent years, mainly to electrify rural communities. Although these technologies are suitable for providing electricity in isolated and remote rural areas, their implementation programs have not been successful as expected. This review provides broad-spectrum view about the energy situation in Nepal and highlights the current policies and subsidies for the optimal utilization of renewable energy resources in isolated and poor rural communities. In addition, major promotional barriers for their implementation in Nepal have been discussed. (C) 2011 Elsevier Ltd. All rights reserved.