Abstract: A heat transfer and storage system including a storage chamber containing a phase change material, a water heater having a first conduit in which the potable water is conveyed, and a solar collector having a second conduit through which a heat transfer liquid is conveyed. Portions of the first and second conduits extend through the storage chamber in adjacent heat conducting relationship with fin means interposed therebetween and extending into the phase change material, and connecting means are provided for holding the conduits and the fins in place. A control system is provided for independently controlling the flow of the heat transfer liquid and the potable water in response to the sensed temperature of the phase change material, the heat transfer liquid and the potable water. The storage chamber is provided with an ullage bag for accommodating the expansion and contraction of the phase change material without exposing it to ambient air.