An energy storage system has been designed to study the heat transfer characteristics of paraffin wax during melting and solidification processes in a vertical annulus energy storage system. In the experimental study, three important issues are focused. The first one is temperature distribution in the phase change material (PCM) during the phase change processes. The second one is the thermal characteristics of the paraffin wax, which includes total melting and total solidification times, the nature of heat transfer phenomena in melted and solidified PCM and the effect of Reynolds number as inlet heat transfer fluid (HTF) conditions on the heat transfer parameters. The final one is to calculate heat transfer coefficient and effectiveness during solidification process. The experimental results proved that the PCM melts and solidifies congruently, and the melting front moved from the top to the bottom of the PCM container whereas the solidification front moved from bottom to the top along the axial distances in the PCM container. Experiment has been performed for different water flow rates at constant inlet temperature of heat transfer fluid for recovery and use of heat. Time- based variations of the temperature distributions were explained from the results of observations of melting and solidification curves. Charging and discharging processes were carried out. Heat transfer characteristics were studied.