Abstract In this paper, to provide the cold water required in a factory, a refrigeration system with a storage tank is designed with two different storage modes i.e. full and partial in comparison with the non-storage system. Two different storage scenarios including cold water and ice are examined. The thermo-economic analysis is performed to study the performance of the system comprehensively. It is shown that, the volume of the storage tank in ice storage-full mode, cold water storage-partial mode and cold water storage-full mode cases are 410%, 510% and 2300% respectively, higher than volume of the storage tank in ice storage-partial mode. For full cold water storage, the current energy consumption is reduced by 72% compared to the direct cooling mode without the storage tank. The results show that a system with the partial storage of cold water has a lower initial cost than a non-storage system. Furthermore, less energy and current costs will be achieved by the partial cold water storage system. Full storage of cold water can be considered as an option, with the 14-year payback.