The only Asian country to have surplus energy generation is Bhutan. Not only energy surplus, but also energy export to India forms an important part of the country's economy accounting to 45% of the net national revenue and 19% of the GDP in 2012-13. 99% of the energy produced is from hydropower. It is of serious concern that for developing hydropower lot many considerations like environmental, economic etc. are to be made. Also there is reduction of about 300MW during the winter dry season and there is less possibility of energy export from India, which is Bhutan's main energy partner. Therefore alternative energy sources are to be sorted out so that the energy sources will become diversified. Bhutan is looking for energy production from renewable resources like solar, wind and biomass and have programs for improving energy efficiency and also for using clean fuels for transportation. This paper looks into the current energy scenario of Bhutan to understand the solar energy potential of the country. The technologies which can be developed indigenously like solar collectors, solar dryers, and solar cookers were also explained. The methods to overcome the challenges for implementing solar based energy systems were also discussed.