In this study a novel design methodology for household refrigeration systems focused on both energy savings and cost reduction is presented and evaluated. Mathematical models were put forward for each of the system components and used to simulate the energy performance of the entire refrigeration system. The system simulation model was validated against experimental data obtained for a single-door 300-l vertical freezer. It was found that the model predictions for the energy consumption, cooling capacity and runtime ratio deviated from the experimental data within an error band of +/- 10%. An optimization algorithm was built upon the simulation model to size the condenser and evaporator heat transfer areas, and also the cabinet insulation thickness aiming at minimizing the total cost of the refrigeration system for a target energy consumption. A trade-off relation between the minimum cost and the minimum energy consumption was achieved, bringing about a system configuration that consumes 14% less energy than the baseline system if the total cost remains unchanged. The effect of the compressor stroke volume and efficiency on the minimum cost was also taken into account. It was demonstrated that the refrigerator/freezer becomes less costly in cases where highly efficient compressors are used in low energy consumption refrigerating appliances. (C) 2011 Elsevier Ltd. All rights reserved.