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In engineering practice exergy can be used for technical and economic optimization of energy conversion processes. The problem of increasing energy consumption suggests that heating plants, i.e. hot water boilers, as energy suppliers for household heating should be subjected to exergy and energy analysis. Heating plants are typically designed to meet energy demands, without the distinguished difference between quality and quantity of the produced heat. In this paper, the energy and exergy analysis of a gas fired hot water boiler is conducted. Energy analysis gives only quantitative results, while exergy analysis provides an insight into the actually available useful energy with respect to the system environment. In this paper, a hot water boiler was decomposed into control volumes with respect to its functional components. Energy and exergy of the created physical model of the hot water boiler is performed and destruction of exergy and energy loss in each of the components is calculated. The paper describes the current state of energy and exergy efficiency of the hot water boiler. The obtained results are analyzed and used to investigate possibilities for improvement of availability and reliability of the boiler. A comparison between the actual and the proposed more reliable solution is made.