Abstract: A thermal energy storage system is disclosed for heating a liquid and establishing and maintaining thermal stratification of the liquid in a storage tank. The tank, which may store hot water for domestic use, contains a vertical header assembly which functions to greatly reduce the momentum of incoming heated water and to transport the water up or down in the tank to a distribution level containing water of temperature equal to that of the incoming water. Positioned outside the tank is a heat pipe heat exchanger for heating storage liquid withdrawn from the tank. A solar-heated working fluid is circulated through one chamber of the heat exchanger to vaporize a heat pipe fluid. The heat pipe fluid in turn heats storage liquid pumped through a separate chamber of the heat exchanger from a lower part of the storage tank, after which the heated storage liquid is returned to the tank and distributed by means of the vertical header assembly.