Abstract: A heating and cooling system is provided which utilizes a heat exchange material such as water which undergoes reversible phase changes from a solid to a liquid phase during operation to store heat energy. The system includes a storage chamber, solar, ambient collector air distribution apparatus, water heater, a compressor, a first circulation loop between the storage chamber and air distribution apparatus for supplying heat and a second circulation loop between the storage chamber and air distribution apparatus for cooling, each loop containing a heat exchange fluid. The system has enhanced efficiency because it supplies heat at the low temperature required for environmental space heating and domestic hot water.