This study highlights the PCM potential application with heat pump (HP) throughout the year under Egypt's climatic conditions. In summer, the stored cooling energy at night is used inside the hot space to reduce the HP cooling load during the daytime. However, in winter, the hot storage energy inside the PCM during the daytime reduces the HP heating load at night. RT 18 HC of 17–19 °C phase change temperature is employed in building space for summer and winter, respectively. Mathematical modeling of PCM-based HP system is developed using MATLAB-Simulink and validated with literature. During summer, results demonstrate that PCM-based HP, under forced convection, significantly attains 4.6% electricity saving compared to HP without PCM. Increasing outdoor temperature from 35 to 40 °C dwindles the average cooling capacity and COP from 2.8 kW and 12 to 2.6 kW and 8, respectively. There is a remarkable distinction when adopting natural convection over PCM platers rather than forced convection counterpart, highlighting 8.6% electricity saving, at 35 °C ambient temperature. In winter, incorporating the same PCM inside the conditioned room reduces the energy-saving potential by 1.4%, under natural convection. PCM-based HP attains a substantial payback period of 7.9 years and carbon dioxide mitigation of 7.5 kg/year.