A solar pond consisting of transparent compound honeycomb encapsulated with Teflon film and glass plates at the bottom and top surface respectively, floating on the body of a hot water reservoir is considered and analysed for the heat transfer processes in the system. A mathematical model is developed where the energy balance equation of the convective water is formulated by considering its capacity effects, various heat losses and solar energy gain through the surface insulation and is solved by the finite difference method. Transient rate of heat collection and storage characteristics are investigated. Explicit emphasis is laid on the effect of the thickness of the bottom encapsulation on the year-round thermal performance of the system and results seem to favour the minimum thickness. The annual average efficiency of the transparent honeycomb insulated solar pond is found to be higher than the conventional salt gradient pond by a factor of about 2.