Abstract Distributed energy system becomes increasingly popular due to high efficiency and low pollution emissions. When it operates following the electricity load, thermal energy storage system can be used to accommodate surplus cooling and heating and improve the energy efficiency. This study investigates the energy and economic performance of thermal storage systems for surplus cooling and heating in distributed energy system, considering the impacts of climates, building combinations and cooling/heating supply systems. Results show that the thermal storage system can improve the primary energy efficiency and is more useful when residential buildings adopt centralized heating and decentralized cooling systems. By varying climates and building combinations, the thermal storage system can improve the primary energy efficiency by 0.28%–3.69%. The economic performance is not promising with a long payback period. The main reason is that the overall utilization rate of the surplus energy is low (less than 45%), especially when the cooling/heating load is low continually during spring and autumn. Additionally, the effect of static and dynamic thermal storage model is analyzed. Results show that the static model would over-estimate the performance of the thermal storage system significantly and the dynamic model is recommended.