This paper describes a study designed to quantify the effect of daily domestic hot water loads and system design on the performance of solar domestic hot water systems employing a recirculating distribution system. A solar domestic hot water system judged representative of the systems funded by the HUD Solar Demonstration Program, along with a modification to this system, was modeled using the TRNSYS simulation computer program. Results of simulations over a repre-sentative climatic period show that daily domestic hot water usage significantly affects solar sys-tem performance. Notable improvement in system performance can be obtained by the use of a recirculation return to solar storage system configuration within a specific range of daily domestic hot water loads. An optimum system was developed from parametric variations of system design and modeled on an annual basis. Comparison is made to modeled system performance of the original design.