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The penetration of renewable energy is one of the main challenges for sustainable energy development. Local governments across the European Union commit to development and implementation of the Sustainable Energy (and Climate) Action Plan. This paper focuses on the case of Lithuania—a Central and Eastern European country. Almost one-third of Lithuanian municipalities have joined the Covenant of Mayors and prepared the plans that include SWOT analysis. However, there is a lack of information on how those plans contribute to climate change mitigation and sustainable energy development. This study identifies the links between key policy financial instruments, increasing energy efficiency. The Strategic Action Plans aimed at reducing GHG emissions and energy consumption in Lithuanian municipalities are analyzed. The challenges in promoting the renewable energy generation in Lithuanian rural regions are discussed. Moreover, the importance of strengths, weaknesses, opportunities, and threats identified is elicited at the local level. The study uses a combination of methods, such as expert surveys and SWOT analysis, that complements the tools used for regional energy climate planning and allows for overarching analysis. The expert survey shows that priority is given for renovation of buildings and modernization of energy infrastructure, making them more sustainable and more energy efficient. The results also show that, in the case of Lithuania (and possibly elsewhere in the post-Soviet countries), conditions and opportunities should be created beforehand to increase energy efficiency. Once this is achieved, the policies should focus on energy transition by switching to sustainable energy resources. [ABSTRACT FROM AUTHOR]