This article aims to present the feasibility of storing thermal energy in buildings for solar water heating while maintaining the comfort environment for residential buildings. Our contribution is the creation of insulating composite panels made of bio-based phase change materials (bio-PCM is all from coconut oil), cement and renewable materials (treated wood fiber and organic clay). The inclusion of wood fibers improved the thermal properties; a simple 2% increase of wood fiber decreased the heat conductivity by approximately 23.42%. The issues of bio-PCM leakage in the cement mortar and a roughly 56.5% reduction in thermal conductivity with bio-PCM stability in composite panels can be resolved by treating wood fibers with an adjuvant by impregnating them in bio-PCM in the presence of the treated clay generated. Clay and wood fiber were treated with adjuvants that are both biological and environmentally acceptable, as confirmed by FTIR spectroscopy. The heat transfer bench (DIDATEK) showed a decrease in thermal conductivity. By using differential scanning calorimetric (DSC) analysis, the investigation of thermal stability and enthalpy during two heating cycles of pure bio-PCM and composite bio-PCM was validated. The novel renewable material was used to create composite panels for the trial prototype, which took the shape of a component attached to the solar heating system, 33.57% less heat was lost, according to the heat transfer research. The outcomes demonstrated the possibility of replacing traditional electric water heating in residential buildings with solar water heating systems.