Highlighting waste as a wealth is the future sustainability of the world. Also, using solar energy stored during off-sun periods will overcome the energy crisis. The introduction of wood chip waste for thermal energy storage systems is a sustainable opportunity. Cellulose derived from wood chips was mixed with the environmentally benign magnetite to form a composite (WCM) and mixed with paraffin-based PCM. The composite was characterized through transmission electron microscopy, TEM analysis, scanning electron microscopy, SEM (augmented with dispersive X-ray analysis, EDX). Micrographs, Fourier transform infrared (FTIR), and X-ray diffraction (XRD), which confirmed that the composite material was prepared. Various system proportions of the composite (0.5, 1.0, 2.0, and 4.0%) are embedded in paraffin, and then the thermal system performance is compared. The experimental data revealed that the addition of 2.0 weight percent of composite material showed superior system performance. Also, differential scanning calorimeter (DSC) and TEM analyses of the paraffin-based WCM-composite materials are conducted. The system achieved a heat gain of 87 kJ/min in comparison to 7 kJ/min for 2.0% WCM-PCM and pristine PCM, respectively. Hence, WCM-PCM embedded with waste stream nanoparticles could be suggested as a potential candidate for heating applications.