method, which combines the TRNSYS 17 simulation software with life cycle assessment and multi-objective optimization, identifies optimal CSHPSS designs for any climatic condition and heating demand profile considering economic and environmental criteria simultaneously. The capabilities of this approach are illustrated through its application to a case study of a CSHPSS located in Barcelona (Spain), which satisfies a heating demand for a neighborhood of 1120 dwellings. Numerical results show that the CSHPSS plant leads to significant environmental and economic improvements compared to the use of a conventional natural gas heating system. Our tool can guide engineers and architects in the transition towards a more sustainable residential sector.