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This work explores the effect of latent heat storage on the performance of a passive‐type mixed‐mode greenhouse dryer for groundnuts drying. Experiments were conducted for mixed‐mode greenhouse groundnuts drying (MMGGD), modified mixed‐mode greenhouse groundnuts drying (MMMGGD), and open sun groundnuts drying (OSGD) under the climate of Hisar (India). Average convective heat transfer coefficients for MMGGD, MMMGGD, and OSGD were 0.738, 0.607, and 0.555 W/m2 °C, respectively, and the respective average evaporative heat transfer coefficients were 113.304, 41.483, and 14.266 W/m2 °C. Energy and exergy efficiencies were found higher for MMMGGD, whereas the specific energy consumption was found lower as compared to MMGGD. Statistical analysis has shown the appropriateness of the page model for predicting the thin‐layer drying behavior of groundnuts for MMGGD, MMMGGD, and OSGD. The lower value of energy payback time (4.47 years) and the higher value of CO2 mitigation (953.299 tons) for MMMGGD show the environmental suitability as compared to MMGGD. Practical applications: The present study focuses on the development of drying systems to prevent post‐harvest losses in groundnuts due to moisture and uncontrolled weather conditions. The temperature range of the proposed modified mixed‐mode greenhouse dryer is suitable for drying for most of the agricultural commodities. This drying system can be used for a range of food crops in different small and medium industries. Due to electrical independence, the proposed system seems best suited for small farms and farmers in remote and rural areas. The modified mixed‐mode greenhouse may also be used as a field‐based storage house for grains and freshly harvested crops. [ABSTRACT FROM AUTHOR]