The use of a heat exchanger in solar water heating systems reduces the overall system efficiency. In this paper, we derive a simple “penalty factor” that gives the fractional reduction in thermal efficiency imposed by a heat exchanger immersed in an isothermal integral collector storage (ICS) system. The penalty factor depends only on the effectiveness of the heat exchanger, the capacitance of the hot water delivered, and the product of the loss coefficient and aperture area of the ICS. This factor allows the designer to select an appropriate heat exchanger without extensive simulation or experiments. Application of the penalty factor for a load-side (or on-demand) heat exchanger, which operates intermittently at varying flow rates, is discussed and illustrated through example.

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