Among the different pathways of improving the energy storage and energy utilization in a thermal energy storage system, the formation of thermal stratification in hot water tanks is a promising technology. In this study, we developed a novel numerical model to assess the thermal stratification performance in a hot water tank due to addition of encapsulated phase change material (PCM) by varying the bed height, bed porosity and the encapsulation diameter. The formulation of the present numerical model is devoid of complicated momentum and energy equations. A set of simplified energy balance equations is developed to account for heat transfer between the heat transfer fluid (HTF) and the PCM considering local thermal non-equilibrium. The temperature profile at the outlet of the storage tank during charging process demonstrates an enhancement in the Richardson number by 58.3%, at the end of the charging process, upon doubling the PCM bed height, and the corresponding improvement in the charging efficiency is found to be 54.6%. The melting point of PCM plays a pivotal role on the extent of stratification and storage efficiency, as it dictates the amount of heat diffusion towards the bottom section of TES. During discharge phase, if the HTF flow rate is doubled from the nominal value of 2 L/min, the extraction efficiency is enhanced by similar to 16.7%. (C) 2019 Elsevier Ltd. All rights reserved.