Annual storage is used with active solar heating systems to permit storage of summertime solar heat for winter use. The results of a comprehensive computer simulation study of the performance of active solar heating systems with long-term hot water storage are presented. A unique feature of this study is the investigation of systems used to supply backup heat to passive solar and energy-conserving buildings, as well as to meet standard heating and hot water loads. Findings show that system output increases linearly as storage volume increases, up to the point where the storage tank is large enough to store all heat collected in summer. This point, the point of unconstrained operation, is the likely economic optimum. Unlike diurnal storage systems, annual storage systems show only slightly diminished efficiency as system size increases. Annual storage systems providing nearly 100% solar space heat may cost the same or less per unit heat delivered as a 50% diurnal solar system. Also in contrast to diurnal systems, annual storage systems perform efficiently in meeting the load of a passive or energy-efficient building.