ABSTRACT In this study, the effectiveness of two techniques was investigated to reduce annual building energy demand (ABED) located in hot and desert climates. In the first technique, thermal insulation was used to boost the thermal resistance of the envelopes, and in the second one, bio-based phase change material ( BioPC M R M 27 ) was used. Using numerical methods for five hot and desert regions, the effect of some parameters such as setpoint temperature, installation location, and thermal properties of insulation/PCM on the effectiveness of both techniques were investigated. By installing PCM in the middle layer of the walls, it was found that in 90% of the cases, the first technique had better effectiveness than the second technique in reducing ABED. To enhance PCM efficiency relative to insulation, three approaches were explored: increasing thickness, altering thermal properties, and optimizing installation location. Based on the results, the first two approaches did not yield substantial enhancements in PCM efficacy compared to insulation. The location of PCM installation is very effective in its effectiveness. By installing PCM in different places, it was observed that the presence of PCM in the outermost layer maximizes its effectiveness. In this case, the second technique is more efficient than the first one by 23.63% to 40.4% depending on the climate zone weather.