A teaching tool for thermal system design has been developed for use in standard personal computers. This tool, called the Virtual Energy Lab (VEL), is designed to facilitate the integration of energy conversion and transfer devices into systems that meet specified heating, cooling and power loads. The VEL has a modular configuration, allowing the designer to choose from a number of components to meet given design objectives. The output of some components can be used as inputs to others, and the user can exercise creativity in combining them. As the thermal system is assembled on the graphical interface, the relevant equations are selected automatically and solved as required by the particular design. The models for each VEL component are either based on basic performance equations for generic equipment or on performance charts of actual devices. The thermodynamic irreversibility is the figure of merit used for assessing each design.