Kenya is a country with high energy poverty rates while millions of people, especially in the rural areas, rely on kerosene lamps as a source of lighting. The usage of kerosene is linked with the degradation of different social and economic aspects and parameters, such as health, education, income etc. At the same time, grid extension and connection to that require a very high capital. In other words, the state’s limited financial resources do not allow the sustainable development of rural electrification while rural families cannot afford the installation and consumption costs of electricity in the areas where the national grid has reached. The latest years, alternative solutions to grid connection such as solar lamps, larger solar kits and microgrids have made their appearance in Kenya and they offer the opportunity to people to turn into cleaner and healthier sources of lighting and electricity. This MSc thesis has two goals. The first one is to measure and quantify various differences on socio-economic parameters between kerosene lamps and solar lantern users. The second one is to identify, design and compare alternative solutions to grid extension for rural electrification. Therefore, this work is separated in two parts. The first part is a socio-economic impact study, conducted in Kenya between May and July 2014 as an interview survey. The second part is a techno-economic comparative study between the different alternatives for rural electrification that exist nowadays in Kenya, which has as a base the designing and sizing of renewable energy microgrids for five remote communities in the country. The results of the socio-economic study showed that the source of lighting has a great impact on people’s quality of life, aspects of development and escape from poverty. Families that use solar lanterns recorded better education, health and income levels while the kerosene lamp usage seem to have great connection to drudgery, high expenditures, bad school grades and degraded living conditions. As far as the techno-economic comparative study is concerned, it has been shown that both solar lanterns and microgrids have a significantly lower cost in comparison to the respective expenditures of rural families in Kenya for kerosene lamps and fuel. As a result these technologies are able to cover the gab that is left by the low or zero rates of grid extension in remote areas and they can be an affordable, healthier and more sustainable solution for those rural households that rely on kerosene as a source of lighting and lack at the same time access to essential services such as phone charging, radios and other appliances.