A hybrid thermal energy storage system (HTESS) is proposed for managing simultaneously the storage of heat from solar and electric energy. Solar energy is stored during sunny days and released later during cloudy days or at night, 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 exact solutions and experimental data. Simulations are then performed to examine the effect of various storage materials and of the operating conditions on the thermal behaviour of the HTESS. The results indicate that the consumption of electricity for space heating is minimised when the HTESS consists of a 0.15 m thick wall comprising spherical capsules 0.065 m in diameter filled with n-octadecane. With such a system, the electric energy consumption during the month of January may be reduced by as much as 30%. (c) 2005 Published by Elsevier Ltd.