A new hybrid thermal energy storage system (HTESS), using phase change materials, is proposed for managing simultaneously the storage of heat from solar and electric energy. Solar energy is stored during sunny days and released later at night or during cloudy days and, to smooth power demands, electric energy is stored during off-peak periods and later used during peak periods. A heat transfer model of the HTESS is developed and validated with experimental data. Simulations carried out for a period of 4 consecutive winter months indicate that, with such a system, the electricity consumption for space heating is reduced by nearly 32%. Also, more than 90% of the electric energy is consumed during off-peak hours. For electricity markets where time-of-use rate schemes are in effect, the return on the investment in such a thermal storage system is very attractive. (C) 2005 Elsevier B.V. All rights reserved.