An integrated thermal energy and rainwater storage system for reducing peak electrical demand by air conditioning systems. Such a system includes a water conveyance system for collecting and conveying water to a storage tank for storing rainwater, where the rainwater functions as a lower temperature thermal reservoir while it is being held and awaiting use. The system further includes a residential air conditioning system with an air-cooled condenser unit along with an additional water-to-refrigerant heat exchanger connected to the storage tank on one side, and on the other side connected into the refrigerant lines with reconfigurable flow paths and actuated valves to control the discharging and recharging of the thermal energy storage. The lower temperature and better heat transfer capabilities of the rainwater improve operating efficiency and reduce power consumption of the compressor when used instead of the air-cooled condenser during the hottest hours of the day.