Abstract: A space heating system having a low inertia (low mass and low water content) boiler and a larger heated water storage tank providing a bank of hot water (hereafter called the heat bank) and a "fly-wheel" effect. This provides a thermal bank or load leveler. The temperature of the water in the tank controls "on-off" operation of the furnace of the boiler. The heat sensing means for the heated space controls only the operation of the circulator in the system. A plurality of zones with a common return may be used. The flow rate from the boiler into each of the zones is controlled to be less than the rate of flow from the boiler to the heat bank so that its stored supply of heated water may be quickly established. A domestic water heating coil may be mounted in the heat bank. The connection from the boiler to the heat bank is preferably to the top of the tank which forms the heat bank. The connections to the domestic water heating coil are also preferably at the top of the heat bank.