The phase change and heat transfer characteristics of a eutectic mixture of palmitic and stearic acids as phase change material (PCM) during the melting and solidification processes were determined experimentally in a vertical two concentric pipes energy storage system. This study deals with three important subjects. First is determination of the eutectic composition ratio of the palmitic acid (PA) and stearic acid (SA) binary system and measurement of its thermophysical properties by differential scanning calorimetry (DSC). Second is establishment of the phase transition characteristics of the mixture, such as the total melting and solidification temperatures and times, the heat transfer modes in the melted and solidified PCM and the effect of Reynolds and Stefan numbers as initial heat transfer fluid (HTF) conditions on the phase transition behaviors. Third is calculation of the heat transfer coefficients between the outside wall of the HTF pipe and the PCM, the heat recovery rates and heat fractions during the phase change processes of the mixture and also discussion of the effect of the inlet HTF parameters on these characteristics. The DSC results showed that the PA-SA binary system in the mixture ratio of 64.2:35.8 wt% forms a eutectic, which melts at 52.3 degreesC and has a latent heat of 18.1.7 J g(-1), and thus, these properties make it a suitable PCM for passive solar space heating and domestic water heating applications with respect to climate conditions. The experimental results also indicated that the eutectic mixture of PA-SA encapsulated in the annulus of concentric double pipes has good phase change and heat transfer characteristics during the melting and solidification processes, and it is an attractive candidate as a potential PCM for heat storage in latent heat thermal energy storage systems. (C) 2003 Elsevier Ltd. All rights reserved.