Abstract: A thermal energy storage system (TESS), effectively a thermal energy battery, is characterized by combination of wet and dry tanks and a circuitously routing of a liquid heat exchange medium from the wet tank through the dry tank such that electrically or fluidically sourced thermal energy can be stored in a dry heat-storage medium, and later released on demand. An optional phase change material (PCM) may be held in a third tank that is likewise circuitously served with the liquid heat exchange medium to enable more sudden and rapid release of energy when the PCM drops to its phase change temperature, for more instantaneous response to heat demand. The TESS may serve space heating and/or hot water demands of a residential home or other small building. The heat exchange medium may be warmed through operation of a heat pump acting in an air conditioning capacity to cool an indoor space.