Using phase change material (PCM) in the building envelope can provide energy saving advantages by shaving peak heating and cooling loads. However, the poor thermal conductivity of PCMs limits their application and potential benefits because of inadequate heat storage/release rates. Increasing effective thermal conductivity by adding metal nanoparticles with high thermal conductivity to PCM (NPCM) could be a promising method to accelerate the phase change process, thereby exploiting latent heat more effectively. The potential impact of the utilization of NPCM technology has not yet been adequately explored for building external walls. This study aimed to reveal whether the dispersal of highly conductive nanoparticles in PCM in external building walls helps conserve energy or not. PCM enriched with aluminium oxide nanoparticles (Al2O3) with a content of 1, 2, and 3 vol% was used. The outputs showed that the nanoparticle addition decreased the energy-saving performance of PCM since the reduction in the thermal resistance and latent heat capacity caused by the nanoparticles loading was more profound than the enhancement provided by the improvement of latent heat exploitation caused by the increased thermal conductivity. For example, heating energy saving was reduced by 0.6% when a 3-cm PCM with 1 vol% Al2O3 was used instead of a pure PCM. The negative impact increased to 1.7% by increasing the nanoparticle concentration to 3 vol%. Thus, augmenting the thermal conductivity for higher latent heat activation by adding nanoparticles was not beneficial for building wall applications in a hot-summer Mediterranean climate. Highlights Effect of nanoparticle-enhanced PCM on building energy saving. PCM with Al2O3 content of 0, 1, 2, and 3 vol% embedded in external wall. Yearly energy saving of 20.7% was achieved with pure PCM in the wall. Adding 3 vol% Al2O3 to PCM reduced heating energy saving by 1.7%. Negative effect on energy saving increased with increasing nanoparticle concentration.