The building sector is responsible for the highest portion of energy consumption and carbon dioxide emissions. To partly address this issue, the scientific community is placing greater emphasis on the utilization of Building Integrated Solar Systems (BISS) as a means of improving building thermophysics and decreasing primary energy demand. Within this framework, Integrated Collector Storage Solar Water Heaters (ICSSWH) have the potential to significantly decrease the costs associated with the installation and maintenance of building-integrated solar systems (BISS), all while optimizing the utilization of solar power. Nevertheless, ICSSWHs exhibit certain limitations in their capacity to retain thermal energy, particularly during nocturnal periods. One potential approach for enhancing the efficiency of ICSSWH collectors involves the integration of Thermal Diodes (TD), which have the capability to optimize heat absorption while minimizing heat retention. In this context, to advance the state-of-the-art in the field, this paper presents a novel dynamic simulation tool conceived to assess the performance of an innovative Hybrid Photovoltaic Thermal ICSSWH (the HyPVT), incorporating a cutting-edge Planar Liquid Vapour Thermal Diode (PLVTD), and purposely designed to be integrated into buildings’ envelope. By using the developed simulation tool, the performance of the proposed HyPVT collector concept is investigated with the aim of assessing its collection and retention efficiencies under different boundary and operating conditions. Furthermore, to show the effect of the Planar Liquid Vapour Thermal Diode (PLVTD) adoption, a comparative analysis is conducted between the proposed ICSSWH and a conventional one (without a thermal diode). Finally, the developed tool will be utilized in forthcoming research to determine the optimal device configuration through the utilization of a model-based design methodology.