Significant energy mismatch exists in solar water heating systems as the time and amount of solar energy supply are usually different from that of hot water demand. Using a hot water storage tank can reduce or eliminate such mismatch in short term while it is difficult to avoid this mismatch in long term. In many optimal design and life-cycle analysis methods, the energy mismatch is ignored which causes the system performance to be overestimated and also misleads the optimal design of the system. This paper presents a simplified method for optimizing the key parameters of solar water heating systems based on life-cycle energy analysis. This optimal method considering the energy mismatch phenomenon can be implemented through two steps. In the first step, a simplified energy model based hourly energy matching different components of the system, is developed for determining the operating performance of system with different solar collector areas and water storage volumes. In the second step, the law of diminishing marginal utility is employed to determine the optimum size of the system. The optimum size is identified when the maximal life-cycle net energy saving is achieved. A case study on the application of the proposed method in a building is presented as well.