Abstract: A system comprising a water tank, a heat source, which is external of the water tank, a first conduit and a second conduit and further conduits for connection of the water tank with a user. In a discharge mode of operation, water flows through the first conduit to a user only from the upper portion of the tank. Return water flows through the heat source and further to the second conduit and into the lower portion of the tank. In a charge mode of operation of the system, no water flows to the user and no return water is introduced in the system. A pump is operated to remove colder water from the lower portion of the tank via the second conduit and pass the water to the heat source and back to the upper portion of the tank via the first conduit. The system further comprises a five-port valve for switching the operation from charging and discharging and vice versa based on a water flow into or out of the system.