A refrigeration system is provided, such as for use with chillers. The system uses a tube-side condenser, such as a microchannel condenser, along with a shell-side evaporator such as a falling film evaporator. A flash tank economizer is disposed between the condenser and the evaporator, and an inlet valve to the flash tank is controlled based upon subcooling of condensate from the condenser. The vapor exiting the flash tank may be fed via an economizer line to a system compressor. Liquid phase refrigerant combined with some gas phase refrigerant exits the flash tank and is directed through an orifice before entering the evaporator.