Most of the modern day energy needs is being supplied by fossil fuels and these are consumed at such a rate that the reserves of oil and gas would last for not more than 250 years. If we try to see the implications of these limited reserves we will be faced with a situation in which the unit cost of energy will be high and concern about the environmental pollution caused by burning of the fossil fuels. Solar energy is one of the important renewable energy source and an important application in the water heating for domestic and industrial purposes. It incorporates the collection of a solar energy and hot water storage in one unit. The aim is to investigate the effect of different parameters on the thermal performance of this system with the aim of reducing both the initial and the running costs. The outlet service water temperature was used as a measure of performance, because it is an indicator of the energy acquired from the solar radiation. The continuity, momentum and energy equations of the fluids involved in the system were numerically solved in a steady state condition, using FLUENT software. Three-D CFD models were developed and validated using previous experimental results. A standard k-ω turbulent model was used in the optimization of the heat exchanger. The surface-to-surface radiation model was included. The effect of single and double row heat exchangers with different lengths investigated. Circular and elliptic cross-section pipes were also examined. Mass flow rates of 500 and 650 L/h were choosen. The results showed that the single row HX of 10.8 m length for both the elliptical and type B tube gave high service water outlet temperature and with low pumping power.