Palau goes for energy efficient homes

In Palau IUCN is helping to build new homes that use less energy and saves money on power bills for both the home owner and the utility company.

A completed Model Home in Palau.


Palau is a former territory of the United States of America which gained independence in 1994. With a population of about 20,000 Palau has the highest GDP per capita amongst Pacific Island Countries. Palau is a small country lacking significant economies of scale and has dispersed outer islands’ populations that are difficult to serve. In addition, environmental vulnerability as a result of climate change is significant.

Being almost 100 % dependent on imported fossil fuels, Palau is highly susceptible to international energy market movements and price volatility. It has the highest electricity consumption of 6,509 kWh per capita surpassing the world average of 2,777 kWh by almost 60%.


Recognising that improving the efficiency of energy use has greater impacts in reducing dependence on imported petroleum fuels, Palau intends to focus on promoting and raising awareness on energy efficiency measures directly to the population.

To build the new homes, IUCN works with the National Development Bank of Palau (NDBP) through an innovative financing scheme called the Energy Efficiency Subsidy Programme (EESP), which allows the people of Palau to own a new energy efficient home.

Through this EESP, moderate income families can build new homes, with choices of energy saving features suitable for the Palau environment. The NDBP provides subsidies to the borrower ranging from a minimum of $3,000 to $10, 000 (US Dollars), depending on the type and number of features selected by the new home owner.

Home owners have a range of energy saving options to choose from including: tinted or high performance glass, solar water heaters, hot water piping insulation, exterior window shading or awnings, energy saver lights and energy star appliances.

To help interested clients decide on what energy saving features they prefer, four energy model homes are available for viewing. These model homes enjoy the maximum subsidy of USD $10,000, in return for showing would-be customers the energy efficient features in their homes.

In 2010 the EESP was extended to include housing under the Palau Housing Authority (PHA).

Progress from 2008 to the end of 2012 is as follows:

Homes Total
Completed Model Homes 4
NDBP Energy Efficient Homes completed 27
PHA Homes completed 17
NDBP Energy Efficient Homes under construction 14
PHA Homes under construction 1
Total 60

Awareness is a key component of the EESP and has been on-going since the beginning of the project.

To target the housing sector in Palau and implement a mechanism to finance energy efficiency measures in new homes.


  • New home owners are registering a lower electricity bill – 15% decrease – when measured against a comparable home. Lower electricity bill translates into higher disposable income.
  • The power utility has registered a decrease in peak demand thus increasing its ability to meet extra demand. This translates into less fuel being used for power generation hence a saving for the utility.
  • The project has created a market for energy efficient products.
  • More people are aware of the benefits of energy efficiency.
  • There is expressed interest from Development Banks in other Pacific Island Countries to replicate the programme. This provides an opportunity to scale up the energy efficiency programme and the cascading effects in the Pacific region are many folds – new markets developed, less dependence on imported fuels, increase national energy security, less greenhouse gas emission, etc.

Phase I: 2008 – 2012
Phase II: 2012 – 2014


  • Directorate General for Development Cooperation (DGCS), Italian Ministry of Foreign Affairs
  • Austrian Development Cooperation
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