Using the Bhutan Living Standard Survey (BLSS) data for the year 2007, this paper attempts to identify and analyze the factors that are likely to influence household decisions when choosing a particular energy source for various uses such as lighting, cooking, and heating. A multinomial logit selection model has been applied for this identification and analysis. The results show that a household's choice of cleaner fuels for lighting, cooking, and heating is driven by level of income, age, education and gender of the household head, access to electricity, and location. Households with a better-educated or female head, those with a higher level of income, and urban households, have a higher probability of switching to the use of clean energy, while poor households, rural households and those with a low level of education are constrained by these factors to continue using dirty energy. The study shows that female-headed households are more likely to choose cleaner fuels, and that above all the availability of a clean and cost-effective source of energy within the proximity is an important factor in the adoption of clean energy. We combined BLSS 2003 and 2007 and conducted similar analyses and confirmed the robustness of the result.