Lesotho's energy profile is characterized by a predominance of traditional biomass energy to meet the energy needs of the rural households and a heavy dependence on imported petroleum for the modern economic sector needs. As a result, the country faces challenges related to unsustainable use of traditional forms of biomass and exposure to high and unstable oil import prices. There are relatively abundant renewable energy resources in the form of hydro, solar and wind. The average daily solar radiation in Lesotho varies between 4.5 and 6.5kWh/m2, with some areas in the South West averaging over 7kWh/m2/day. Under the UNDP/GEF-supported Lesotho Renewable Energy-Based Rural Electrification (LREBRE) Project, a total of 5000 solar home systems (SHS) will be installed by 2012. Since the start of the project, a total of 1537 SHS with a capacity of 65W have been installed, and an estimated 500 SHS have also been independently installed as a result of the project's influence. This paper examines the role of PV technologies in the sustainable development process, with particular reference to UNDP/GEF-LREBRE Lesotho PV project, and the extent to which this project is impacting on the PV industry. The paper also analyses national grid electrification and energy provision in rural areas and shows that the problem of rural electrification could be tackled by conventional and non-conventional means.