The global energy supply is currently based mainly on fossil fuels such as oil, natural gas, and coal. These fossil fuels cause serious environmental, political and social problems. Therefore, it is imperative to look for more sustainable energy sources that may solve the abovementioned problems. For several decades, (inter)national governments have made plans to reduce the economy’s dependency on fossil fuels by the substitution of alternative energy sources such as renewable energy sources. The Technological Innovation Systems approach is most suitable for the analysis of the development and diffusion of renewable energy sources, because it focuses on a particular technology and it includes factors that are specific to the technology studied. In this research work we have presented the relation between the way in which System Functions are being fulfilled and how they contribute to the development and diffusion of biomass energy particularly Jatropha biofuels in Tanzania, since the technology is locally so novel that it will require substantial experimentation in order to be commercially viable and applicable on a larger scale.