This paper proposes a new direct expansion solar assisted ejector-compression heat pump cycle for water heater which can efficiently utilize the solar energy and air energy. The new cycle has two operation modes to be chosen according to the solar radiation intensity. The energetic and exergetic performance of the new cycle is analyzed based on the built simulation model. Under the given conditions, the new cycle outperforms the basic ejector enhanced cycle in the heating coefficient of performance (COP) and heating capacity aspects by up to an average of 13.78% and 20.41%, respectively. The simulation results indicate that the operation mode A is more suitable for the low/zero solar radiation condition, while it's preferable to choose the operation mode B for the high solar radiation condition. The increase of the solar radiation intensity significantly benefits the performance of the new cycle, but decreases the system exergy efficiency. The exergy analysis also reveals that although the exergy destruction percentage of the solar collector increases with increasing the solar radiation intensity, the total exergy destruction percentage of other components decreases. The increase of the solar collector area always contributes to the performance improvement of the new cycle, but it should be kept in a proper range to guarantee the excellent performance and normal operation of the system. (C) 2016 Elsevier Ltd. All rights reserved.