Abstract In order to decrease greenhouse gas emissions and global warming, solar hot-water household systems containing thermoelectric generators that generate electricity and also store thermal energy are a partial potential solution. However, few studies have reported on the performance of these hybrid systems that can generate nighttime electrical power from excess stored solar thermal energy. A novel high-performance solar thermoelectric lab-scale system using composite phase change materials (consisting of paraffin, high-density polyethylene, and expanded graphite) was fabricated and tested to fill this knowledge gap. This lab-scale system's performance was evaluated by analyzing its thermal behavior both experimentally and theoretically for lab-scale use. The experimental results showed the system's maximum overall efficiency (all-day) was 55.2%. The simulated case study revealed that the scaled-up system with composite phase change materials has the potential to provide 420–426 L of warm water per day, 1.125 kWh of electricity with solar irradiance (simulating daytime operation), and 0.301 kWh of electricity at night for a standard house with 6.34 m2 of available roof surface area in Tokyo, Japan. The present study results indicated that this novel lab-scale system can utilize solar energy more effectively than conventional systems and is a promising technology to generate electricity for all-day operation and produce warm water without emitting any CO2. In other words, the proposed lab-scale system has a great potential to contribute to a future low-carbon society.