In this study, first of its kind novel design of forced draft paddy straw bale combustor (FDPSBC) coupled with innovative pilot fuel injection system (PFIS) and furnace embedded internal water heat-exchanger for large scale water heating is presented. PFIS is optimized to spray 1.5 ml of diesel after every 3 min interval to achieve complete combustion of the compressed bale by maintaining the flame sustainability. Stainless steel heat-exchanger has 62 L water holding capacity circulating at the rate of 36 L per min using the heat of flue gas and has the capacity to heat 1000 L of water from 30 degrees C to 65 degrees C within three hours. Heat of combustion (> 90% combustion efficiency) was utilized to generate flue gas at 350 degrees C and hot water above 65 degrees C applied to 100 m(2) area greenhouse heating located at Punjab Agricultural University, Ludhiana (30.56 degrees N), Punjab, India by designing two heat sink pipe networks; flue gas heat sink pipe network (FGHSPN) fabricated with galvanized iron (GI) and hot water heat sink pipe network (HWHSPN) fabricated with mild steel (MS) respectively laid inside the greenhouse for transfer of heat by radiation and free convection modes. Developed mathematical models showed that FGHSPN was able to transfer 9.6 kW (74%) and where as HWHSPN could transfer 3.38 kW (26%) of heat respectively out of the total heat (12.98 kW) transferred by both the networks to maintain the greenhouse air temperature 10 degrees C higher than the ambient air temperature after sunset hours as validated by experimental trials conducted in the month of November 2017. Installation cost of FDPSBC technology is Rs 5,00,000 ($8000) and with 24 h continuous operation, it can save about 80 kWh per day and can recover the 50% of installation and operating costs within five years time besides managing about 27% of the total paddy straw available in the state of Punjab (India) through useful heating applications including greenhouse heating.