In countries with high heating demand, waste heat from industrial processes should be carefully utilized in buildings. Finland already has an extensive district heating grid and large amounts of combined heat and power generation. However, despite the average climate, there is little use for excess heat in summer. Waste incineration plants need to be running regardless of weather, so long-term storage of heat requires consideration. However, no seasonal energy storage systems are currently in operation in connection with Finnish waste incineration plants. This study used dynamic energy simulation performed with the TRNSYS 17 software to analyze the case of utilizing excess heat from waste incineration to supplement conventional district heating of a new residential area. Seasonal energy storage was utilized through a borehole thermal energy storage (BTES) system. Parametric runs using 36 different storage configurations were performed to find out the cost and performance range of such plans. Annual energy storage efficiencies from 48% to 69% were obtained for the BTES. Waste heat could generate 37–89% of the annual heat demand. Cost estimations of waste heat storage using BTES are not available in the literature. As an important finding in this study, a levelized cost of heat of 10.5–23.5 €/MWh was obtained for various BTES configurations used for incineration waste heat storage. In the three most effective cases, the stored heat reduced annual CO2 emissions of the residential area by 42%, 64% and 86%. Thus, the solution shows great potential for reducing carbon emissions of district heating in grids connected to waste incineration plants.