Micro hydroelectric systems have been implemented in Ifugao, Philippines over the past few years. These approaches adopted a top-down approach where the local government or NGO implements a system within a rural community without proper community engagement. The authors of this paper believe that community engagement is paramount for the success of any rural development project. It gives the community a sense of ownership and empowerment during the implementation and usage of any project. The authors adopted a bottom-up approach for a planned micro-hydroelectric system in the village of Duli, Ifugao Philippines. The community was selected after multiple trips to various communities across the region. Duli was selected because the community members showed enthusiasm and exhibited the ability to present income generating activities for electric energy such as a welding shop, tailoring facility and bakery. The authors then worked with the community to develop a business plan for the construction, implementation and maintenance of the system. Multiple meetings were held with community members to present ideas and obtain feedback to develop the business plan as the community sees fit. Community surveys were held to get a better understanding of the local community population and layout. Moreover, a socio-economic and socio-cultural analysis was completed in order to guide the business plan development. A terrain and household mapping survey was completed to guide the engineering design work that served as a basis to estimate the system cost. The paper provides the steps carried out by the authors to complete the work and presents the lessons learned from the experience.