A commercial room air conditioner of 12 thousand Btuh (3.5 kW) was modified to provide both cooling and hot water heating. Tests were carried out using the unit as an air conditioner only and using it for both cooling and hot water heating. It was found that the modified unit can be used for hot water heating without losing its cooling capacity. It was also found that the unit can provide a continuous hot water supply for showers if a small hot water tank is installed to cater to the initial requirement.