As thermal energy storage (TES) technologies gain more significance in the global energy market, there is an increasing demand to improve their energy efficiency and, more importantly, reduce their costs. In this article, two different methods for insulating TES systems that are either incorporated inside residential buildings or buried underground in direct vicinity of the building are reviewed and discussed. Boundary conditions are storage volumes in the range 10 – 1000 m3 and storage temperatures up to 90 °C. The first method involves the application of thermal insulation materials on the outside of the storage. Thermophysical properties and costs of conventional materials (such as mineral wools and organic foams) are compared against those of state-of-the-art products such as vacuum insulation panels and aerogels. A parametric comparative analysis is conducted to evaluate the combined costs of thermal insulation and living space occupied by the thermal insulation for TES systems integrated inside buildings. It is shown, for example, that the use of vacuum insulation panels becomes advantageous when the economic value of saving living space outweighs the extra cost of the insulation itself. The second method discussed is the so-called evacuated powders, in which the insulation is realized by creating an evacuated double-wall powder-containing envelope around the storage. The theoretical foundations of this method are discussed and the properties of commonly used powders – such as expanded perlite and fumed silica – are provided. Reference costs of double-wall vacuum-insulated TES tanks are provided and the use of evacuated powders is compared against the application of conventional insulation materials. •Thermal insulation is aspect in the optimization of thermal energy storage (TES) systems integrated inside buildings.•Properties, characteristics, and reference costs are presented for insulation materials suitable for TES up to 90 °C.•State-of-the-art thermal insulation materials can lead to significant space and cost savings in seasonal TES systems.•Double-wall vacuum insulated tanks can be buried underground, eliminating the need for valuable space inside buildings.