Sri Lanka energy sector is dominated by conventional energy sources as biomass, hydropower and petroleum. The electricity sector is dominated by hydropower supplying approximately while small component is supplied by oil fired thermal plants. Sri Lanka has a relatively low household electrification level with major variations among urban, suburban and rural areas of the country. Main renewable energy sources capable of offering a substantial contribution to the Sri Lanka electricity generation sector are micro-hydro, wind, biomass and solar. Penetration of RE in the electricity generation sector has been extremely limited by the constraints in financing mechanisms and financial viability. The only exception has been micro/minihydro sector due to its relatively low capital investment and recent opportunities for grid connection. Also the recent World Bank refunded Energy Services Delivery (ESD) project has helped the resurgence of MH sector during the last few years. This paper examinations the feasibility of the use of these renewable sources particularly for electricity generation in Sri Lank along the incentives and barriers to their expansion.