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Factors Impacting Rainwater Harvesting ROI


When you mention a commercial rainwater harvesting system (RWH) to an engineer, developer or owner, one of the first questions you get is “what’s the ROI?” Return on Investment and Net Present Value vary widely depending on specific project variables and there is no one correct answer.  The three largest factors impacting ROI are initial cost of the system, water utility savings, and the value of land space saved for a stormwater BMP. Using the following assumptions, which will vary widely for any project, we can find a range of NPV’s to provide some guides:


  • 1 acre impervious area
  • Net installed cost of the RWH system $70,000 ($100k for RWH and $30k saved on bioretention)
  • Water rates $0.003/gallon (assumes no sewer savings)
  • Net annual maintenance of $1,000 ($1,500 for the RWH and $500 saved on bioretention)
  • Annual value of a parking space is $2,800 (based on average response from 1,100 webinar participants)
  • 30 year life of the system
  • Discount rate of 4%

Estimated NPV for a RWH System Collecting from 1 Acre of Impervious Area

As an example, say your projects is in in Seattle, WA where you might collect 37” of rain annually and you think you could add roughly 6 parking spots by implementing rainwater harvesting instead of a Biofiltration planter. Looking at the table below, this could yield a NPV of $262k for the rainwater harvesting syste

“Potential NPV of a Rainwater Harvest System used for Runoff Reduction”

As a general rule of thumb, it is difficult for a RWH system to pencil out on water savings alone.  If the value of land saved by eliminating an alternative LID BMP is included, a RWH system quickly creates a positive NPV and healthy ROI.

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