SHETLAND Islands Council has been given £133,000 from the Scottish Government to develop an energy efficiency strategy in Yell.
The money will also be used to explore how the energy supply to properties on the island, which has above average levels of fuel poverty, could become more sustainable.
The information gained will be used in developing a Shetland-wide heat and energy efficiency strategy, which will be mandatory for local authorities by 2018/19.
The SIC previously received £500,000 from the Scottish Government's Scottish Energy Efficiency Programme to improve the efficiency of 40 properties on Lerwick's district heating scheme.
But the Yell scheme will also explore how the use of renewable energy sources could be extended further on the island.
The analysis of all of Yell's residential and commercial properties will be carried out by the council's carbon management team.
North Yell Development Council - which oversees the recently completed North Garth wind farm on the island - is supporting the council in the development alongside tidal energy company Nova Innovations and wind group Peel Energy.
SIC estate operations manager Carl Symons said the grant was "welcome news" for the whole of Shetland as it should help the council to show the government that a one-size-fits-all approach doesn't usually work for rural communities.
"It allows us to carry out an in-depth study of a local rural area which has a well above average level of fuel poverty and a constrained electricity supply grid," he said.
"The data we collate will help us to persuade government that many of the local energy problems we face need local solutions.
"To achieve this we need to directly engage with the people of Yell, with the ultimate aim of delivering energy efficiency works - including renewables - that addresses the high price we currently pay for heating our homes, businesses and schools across Shetland."
Chairman of the SIC's environment and transport committee Ryan Thomson - who is also a councillor for the North Isles - suggested that expanding renewables could be one way of tackling fuel poverty in the islands.
"The information gathered from this scheme will go a long way to assisting the SIC in implementing an energy strategy across the whole of Shetland, and we will work alongside local energy producers to explore further," he said.
"Fuel poverty affects over half the Shetland population and is a serious issue in Shetland. Hopefully renewables will go a long way to helping counter this issue across our islands.
"In the meantime, if anyone is struggling with their energy bills I would encourage you to give Citizens Advice a ring on 694696, and always shop around for the best rates and tariffs if you can."
Shetland is one of 15 local authorities in Scotland to receive grants in the latest round funding from Scotland's Energy Efficiency Programme, which will collate information from its pilot projects before going live in 2018.