Abstract: A heat exchanger comprising a refrigerant tube in coil form leading from the output side of a compressor and a water tube in coil form tapped from a source of water to be heated, the tubes being coiled together so that each coil of the water tube is interposed between a coil of said refrigerant tube, and vice-versa. Inner and outer cylindrical sleeves are disposed within and around the coiled tubes thereby defining an annulus which enhances the heat transfer from said refrigerant tube to the water tube. A housing surrounds said coiled tubes and said sleeves, and sealed end caps are provided at each end of the exchanger.