Abstract: A thermal energy storage and transfer system includes solar energy collector means disposed to receive incident solar energy, thermal energy exchange means disposed in a utilization area, three water storage tanks, one of which is at least three times larger than the other two storage tanks. Water is selectively circulated through a first circulation loop between the solar collector and one small tank for transferring solar energy from the collector; through a second circulation loop between the second small tank and the utilization area; and through a third circulation loop between the large tank and the two smaller tanks. A heat pump is coupled between the two smaller storage tanks for transferring thermal energy between those two tanks.