A Cost-Benefit Analysis of Rainwater Harvesting

Rainwater harvesting has provided a water source for communities around the world dating back to circa 1500 B.C. This ancient technology continues to serve populations today, mainly in poor, rural or dry regions of the world and island communities. Contemporary green building and stormwater management programs (e.g., Leadership in Energy and Environmental Design – LEED, Low Impact Development – LID, Better Site Design) suggest that rainwater harvesting can serve as a valuable stormwater management tool even in areas where municipal water supplies are readily available. Regardless, private developers are most apt to incorporate these systems into commercial development designs if the benefits justify the costs.

Analyses of local rainfall data and predicted potential water usage at commercial facilities in Arlington County, Virginia reveal that rainwater harvesting systems conserve potable water, protect surface water quality and minimize flood risk. However, economic analyses from the perspective of a private developer using two case studies of commercial developments in Arlington suggest that the benefits of incorporating rainwater harvesting into building designs do not justify the cost of implementing this technique. Notwithstanding, results from a sensitivity analysis indicate that charging tenants a modest price premium of one percent or less for the privilege of occupying a “green” building yields a positive return to investing in rainwater harvesting.