The overal thermal performance of a solar water heating (SWH) system is significantly affected by the mismatch between the temporal distribution of solar radiation and the heating load. Therefore, a favorable correlation between the collector and storage size should be generated based on the dynamic characteristics of the system. This study focuses on the optimal matching of solar colector area with storage volume for an SWH system (with short-term heat storage capability) for a space heating application. A simplified model of an SWH system based on hourly energy flow is established. System control strategy is integrated into the model in a simple manner without sacrificing computing speed. Based on this model, the combined effect of collector area and storage volume on system thermal performance and economy is analyzed, and a simple procedure for determining the optimal system size is ilustrated. A case study showed that for an SWH system utilized for space heating application, the optimized ratio between storage volume and collector area is dependent on the total collector area of the system, and is dominated by the requirement of overheating prevention. The minimum storage volume for a specific collector area that can prevent the storage tank from being overheated can be adopted as the optimum storage volume for that colector area. The optimum ratio between storage volume and colector area increases as the collector area increases. Therefore, a trade-off between heat collection and heat loss has to be made while attempting to increase solar fraction by improving colector area.