Latent heat thermal energy storage (LHTES) implemented in residential heating systems has attracted attention for its role in peak/load shifting. A novel layout integrating LHTES with a heat pump is proposed to store low grade heat during off-peak demand period, later used as heat source for the heat pump during on-peak demand period. This novel layout is assessed according to different seasons, LHTES height-to-diameter (H/D) ratios, mass ratios of inflow water to radiator return water, and levelized cost of energy (LCOE). The results show that an overall increased amount of power input is required when utilizing LHTES, while it can shift 2.8–3.6 kW electricity from on-peak to off-peak. The case with an H/D ratio of 1.7 shows slight reductions in heating costs and LCOE as compared to a H/D ratio of 0.6. Considering heating costs, a mass ratio of 50 % performs better in December 2022 and a mass ratio of 10 % performs better in January 2023 due to different operating conditions. The heating costs of the integrated system are 1.0 %–2.1 % higher than those of the typical system due to limitations in the rated capacity of the heat pump and lower effectiveness of the shell-and-tube heat exchanger.