The increasing variations in building energy demand and consumption which includes hot water tanks, space heating, and cooling applications, calls for the need to investigate different potential options of meeting these needs with as little dependence as possible on the use of non-renewable energy sources. One of such approach involves the use of phase change materials (PCMs). This paper investigates the potential of using PCMs to improve the thermal performance of residential hot water tanks (HWT) and to shift the peak power demand. Field-measured hot water consumption profiles (low, medium and high) were used to study the impact of the amount of PCM utilized, control strategies on the HWT thermal performance, and peak power demand shift. The study was carried out using a model that included a validated hot water tank integrated with PCMs. The results show that the combined use of PCMs and sensible heat in a HWT resulted in an improvement in the thermal energy storage compared to the HWT without PCMs (only sensible heat). The improvement in thermal energy storage and potential peak power shift are directly proportional to the amount of PCM added in the HWTs. (C) 2014 Elsevier Ltd. All rights reserved.