Abstract: A heating and cooling system for domestic and commercial use which includes a reversible refrigeration system in the form of a heat pump combined with an exteriorly mounted heat exchanger in the form of a solar collector and an interiorly mounted heat exchanger incorporated into a valance supported peripherally adjacent to but spaced downwardly from the ceiling of a space being conditioned. The refrigeration system includes a compressor and the heat exchange system includes a circulation water pump which together with the compressor constitute the major moving parts of the system with heat exchange and air circulation being obtained by convective airflow. The heating and cooling system is interconnected with the domestic hot water system to satisfy a large porportion of the required domestic hot water by utilizing rejected heat.