The application of solar collectors in water heating systems has attracted attention in recent years, however, due to the inconsistency of solar radiation, performance of such systems will fluctuate over time. In this study, performance optimization of a heat pipe evacuated tube solar collector integrated with phase change materials (PCMs), is investigated under normal and on-demand operations. In phase-I, the effect of heat pipe position and in phase-II, the effect of various PCMs are investigated. The results from phase-I show phase change process of PCM was expedited by 48 minutes under on-demand operation compared with conventional system. Additionally, in normal operation, thermal storage enhancement is achieved by 24% increase in PCM’s melting fraction. In Phase-II, the selected PCMs are tritriacontane paraffin, xylitol, and erythritol. In normal mode, the paraffin tube exhibited highest total energy storage of 295.39 kJ/kg, however, the fin temperature of xylitol tube was around 10° C higher compared with the other tubes throughout the day. In on-demand operation, erythritol tube shows energy storage of 413.15 kJ/kg, however, the paraffin tube shows fin temperature difference of 14°C compared with other tubes. Consequently, utilization of paraffin/xylitol in normal and paraffin/erythritol in on-demand operation is recommended to enhance system’s thermal performance.