In this study, a novel solar-assisted auto-cascade heat pump cycle (SAHPC) operating with the zeotropic mixture of R32/R290 for small water heaters is proposed. In the SAHPC system, a cascade heat exchanger (CHEX) associated with a phase separator is used to achieve auto cascade cycle and enhance the overall system performance. The performances of the SAHPC are evaluated by using the developed mathematical model, and then compared with the conventional air-sourced heat pump cycle (CAHPC). Simulation results show the SAHPC has 4.23-9.85% and 4.37-9.68% improvements in COP and volumetric heating capacity compared with those of the CAHPC, respectively, under the same operating conditions. However, the improvement of performance of this novel cycle largely depends on the absorbing heat ratio and the zeotropic composition. It is expected that this new cycle will be beneficial to developing dual-source coupled heat pump applications. (C) 2014 Elsevier Ltd. All rights reserved.