Abstract Thermal energy storage (TES) can significantly increase the overall efficiency and operational flexibility of a distributed generation system. A sensible water storage tank is an attractive option for integration in building energy systems due to its low cost and high heat capacity. As such, this paper presents a model for stratified water storage that can be used in building energy simulations and distributed generation simulations. The presented model considers a pressurized water tank with two heat exchangers supplying hot and cold water respectively, where 1-D transient heat balance equations are used to determine the temperature profiles at a given vertical location. The paper computationally investigates the effect of variable flow-rates inside the heat exchangers, the effect of transient heat source, and buoyancy inside the tank induced by location and length of the heat exchangers. The model also considers variation in thermophysical properties and heat loss to the ambient. TES simulation results compare favorably with similar 1-D water storage tank simulations, and the buoyancy model presented agrees with COMSOL 3-D simulations. The analysis shows that when the inlet hot fluid temperature is time dependent, there is a phase lag between the stored water and the hot fluid temperature. Furthermore, it was observed that an increase in flow-rate inside the hot heat exchanger increases the stored water and the cold water outlet temperature; however, the increment in temperature observes diminishing returns with increasing flow-rate of hot fluid. It was also noted that for either heat exchanger, increasing the vertical height of the heat exchanger above a certain value does not significantly increase the cold fluid outlet temperature. Results from the model simulations can assist building designers to determine the size and configurations of a thermal storage tank suited for a given distributed generation system, as well as allowing them to accurately predict the fraction of heat generated by the system that could be stored in the tank at a given time when charging, or the fraction of heating load that could be met by the tank when discharging.