As the reliance on heat pumps (HPs) for space conditioning increases worldwide, extensive grid strains during utility peak hours are expected. Significant research efforts focus on investigating the use of integrated thermal energy storage (TES) systems to reduce peak energy demands. Conventionally, TES systems are often integrated to store and provide either cooling or heating, but not both. In this work, a single room-temperature phase-change material (PCM)-TES was integrated for dual-mode operation with an R290 air-to-water 10.5 kW (3-Ton) HP. Two PCM melting temperatures (17 ℃, 22 ℃) were assessed to investigate their impact on system performance and cost reductions for Milan, Italy (4A); Barcelona, Spain (3A); and Oslo, Norway (6A). HP and HP-TES performance maps were generated using Modelica-based transient models and co-simulated with a prototype residential building using the Spawn of EnergyPlus™ with simple rule-based controls. Our simulations indicate that PCM-17 ℃ provided annual cost savings at higher peak-to-off-peak cost ratios, as the demand reduction dominated the savings potential. The recharge energy costs and requirements became more dominant at lower cost ratios, making PCM-22 ℃ more beneficial at lower cost ratios. Finally, despite Oslo’s heating-dominated climate, the utility peak hours favor cooling demand reductions, making PCM-17 ℃ more appealing. In all cases, the cost savings potential stabilized between 4 – 10% regardless of cost ratio, suggesting that system-level component and operation control optimization is required to maximize cost savings further.