This paper evaluates the potential of Jatropha curcas Linnaeus (Jatropha) as an alternative source of energy for rural households. The plant is said to have potential to diversify rural incomes, reclaim unproductive lands, reduce importation of fossil fuels, and consequently accumulation of green house gases in the atmosphere. A cost benefit analysis was employed to evaluate the feasibility of producing Jatropha as a biodiesel feedstock in relation to other crops in Kwale district. An IRR of 11 percent, BCR of 0.62 and a NPV of (28267.56) showed that production of Jatropha is not feasible at the moment. However we conclude that the plant has a potential to achieve its intended purpose if there is coordination in research and development along the Jatropha value chain and if technical and financial support is accorded to actors at the production level of the chain.