•Hybrid tanks containing water and phase change materials are studied numerically.•Phase change materials with different melting points are placed in the tanks.•The cascaded configuration is studied in a solar domestic hot water system context.•A system energy balance reveals the benefit of the hybrid thermal energy storage.•The hybrid system can yield increased solar fraction compared to water-only tanks. The current paper explores a multi-tank thermal storage system for multi-residential solar domestic hot water applications. The thermal storage system includes phase change materials (PCMs) of different melting temperatures incorporated in the tanks. The PCMs are introduced as vertical cylindrical modules and water flowing along the length of tank is used as the heat transfer fluid. An enthalpy porosity model was developed to solve for the phase change process within the PCM modules. The model was validated and verified with previous work and predictions were in good agreement (less than 5% deviation). The hybrid tank model was linked with the collector performance. Typical Canadian weather data and a dispersed demand profile for a multi-residential building were considered. The performance of the hybrid system was judged based on the maximum possible storage volume reduction compared to the water only system with the same benefit to the end user. PCM maintains cooler water temperature entering the collector which results in a reduction of collector losses and extension of pump activation time. This increases the delivered energy to the load and hence increases the solar fraction. It was found that cascading four 75 L tanks containing PCMs of melting temperatures 54 °C, 42 °C, 32 °C and 16 °C gives a similar solar fraction to that for a 630 L water only tank. The multi-tank hybrid system thus allowed for over 50% reduction in the required storage volume.