Latent heat storage is one of the most efficient ways of storing thermal energy. Unlike the sensible heat storage method, the latent heat storage method provides much higher storage density, with a smaller temperature difference between storing and releasing heat. This paper reviews previous work on latent heat storage and provides an insight to recent efforts to develop new classes of phase change materials (PCMs) for use in energy storage. Three aspects have been the focus of this review: PCM materials, encapsulation and applications. There are large numbers of phase change materials that melt and solidify at a wide range of temperatures, making them attractive in a number of applications. Paraffin waxes are cheap and have moderate thermal energy storage density but low thermal conductivity and, hence, require large surface area. Hydrated salts have larger energy storage density and higher thermal conductivity but experience supercooling and phase segregation, and hence, their application requires the use of some nucleating and thickening agents. The main advantages of PCM encapsulation are providing large heat transfer area, reduction of the PCMs reactivity towards the outside environment and controlling the changes in volume of the storage materials as phase change occurs. The different applications in which the phase change method of heat storage can be applied are also reviewed in this paper. The problems associated with the application of PCMs with regards to the material and the methods used to contain them are also discussed. (C) 2003 Elsevier Ltd. All rights reserved.