Abstract. Aquifers are underground porous formations containing water. Con ned aquifers are surrounded by impermeable layers on top and bottom, called cap rocks and bed rocks. A con ned aquifer with a very low groundwater ow velocity was considered to meet the annual cooling and heating energy requirements of a residential building complex in Tehran, Iran. Three di erent alternatives of Aquifer Thermal Energy Storage (ATES) were employed to meet the heating/cooling demands of the buildings. These alternatives were using ATES for: cooling alone, heating alone by coupling with at-plate solar collectors, and cooling and heating by coupling with a heat pump. For the economic evaluation of the alternatives, a life cycle cost analysis was employed. For the environmental evaluation, Ret Screen software was employed. For the considered 3 operational alternatives, using ATES for cooling alone had the minimum payback period time of 2.41 years and the life cycle cost of 16000 $. In the environmental perspective, among the 3 alternatives, coupling of ATES with heat pump for cooling and heating had the minimum CO 2 generation, corresponding to 359 tons/year.