Solar energy technology has led to the development of a number of solar applications used for electricity, lighting, cooking and solar thermal systems. The most hopeful among them is the solar thermal system, to achieve the energy necessity for different applications at domestic as well as at the industry level. In this thesis the aim of work is design and model solar thermal system for hot water supply. The selected solar collector and the thermal storage are also designed based on: the amount of hot water supplied to the family of two throughout the day and the energy needed to heat the demanded hot water. Transient performance of the system is computed using a numerical heat transfer model of a Stand-Alone parabolic trough solar collector with active circulation system. The system components are also designed with the appropriate position in a solar water heating system such as, storage system, electrical pump, gate valve open valve as well as heat transfer fluid storage vessel and so on. The molten salt was used as a thermal storage material and the synthetic oil used as a heat transfer fluid. SolTrace software is used to model and simulate the parabolic trough concentrator and absorber tube. The solar power reaching the storage device is determined from the software. The storage device involves sensible latent heat storage mechanism with molten salt as a storage medium. The heat retention capacity of the storage system is determined from charging time and discharging time curves generated by ANSYS software. The time required to store heat in thermal storage is 3.94 hours. The simulation result shows a maximum temperature of thermal storage is approximately 63oC and it takes about 1.5 hours to reach its maximum temperature. While the remaining heat is stored in the form of latent heat and it takes about 2.44 hours. The meteorological data for simulation was prepared by taking the average of five years starting from 2013 - 2017. The solar water heating system was designed and model in accordance with Bahir Dar meteorological data.