The current interest in thermal energy storage is connected with increasing the efficiency of conventional fuel-dependent systems by storing the waste heat in low consumption periods, as well as with harvesting renewable energy sources with intermittent character. Many of the studies are directed towards compact solutions requiring less space than the commonly used hot water tanks. This is especially important for small capacity thermal systems in buildings, in family houses or small communities. There are many examples of thermal energy storage (TES) in the literature using the latent heat of phase change, but only a few are commercially available. There are no distinct generally accepted requirements for such TES systems. The present work fills that gap on the basis of the state of the art in the field. It reviews the most prospective designs among the available compact latent heat storage (LHS) systems in residential applications for hot water, heating and cooling and the methods for their investigation and optimization. It indicates the important characteristics of the most cost- and energy-efficient compact design of an LHS for waste heat utilization. The proper design provides the chosen targets at a reasonable cost, with a high heat transfer rate and effective insulation. It allows connection to multiple heat sources, coupling with a heat pump and integration into existing technologies and expected future scenarios for residential heating and cooling. Compact shell-tube type is distinguished for its advantages and commercial application.