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One of the most widely known solar thermal applications is solar water heating. In terms of installation expenditures and energy cost over the total life of the system, solar water heating technology has proven to be cost efficient for several domestic and industrial applications. Technological practicability of these systems has long been recognized and is presently employed in commercial sectors of many countries. This paper presents an overview of various types of solar assisted water heating systems and their market potential. Residential solar water heating is a promising age old technology, which has been evolved and developed both in the range and quality as a successful packaged market–product. The first part of this paper analyzes the performances along with how unique they are of different types of solar water heating systems and the later part of the paper covers its economic aspects.