There is provided a water heating and storage system, including a heat-insulated main heated water storage tank for storing hot water. The storage tank consists of top, side and bottom walls, has an inlet for heated water entering the tank at a level below the normal level, and a cold water inlet. The system also includes a consumer hot water outlet, and an external water heater having a controlled electrical heating unit, an outlet port for heated water, connectable to the inlet of the tank, and a water inlet port.