The pump is turned on automatically by an electronic differential thermostat. This device reads the temperature in the collectors and also in the storage tank. When the water temperature in the collectors is higher than the tank water, the pump is turned on. Water gets circulated through the panels and solar energy is harvested. So the whole solar system is open to the city water line.
Heat is transferred through a heat exchanger.
An open loop system is more efficient. It is also simpler, and therefore more reliable. Some city codes no longer allow for this configuration. Having boiling water discharging off of your roof can cause injury to persons, pets and plants below. It is advisable to have the relief valve located at the solar tank.