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Investment Evaluation of Rainwater Tanks

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  • Anirban Khastagir
  • Niranjali Jayasuriya

Abstract

Melbourne, Australia faced fourteen consecutive years of below average rainfall before drought breaking rains in 2010. Melbournians are also concerned about the significant increase in potable water price in the future where the cost is expected to increase by 100% in 5 years. Stormwater harvested using rainwater tanks is an alternative source of nonpotable water source where potable quality water is not required for use. However, prior to installing rainwater tanks, customers expected to investigate the financial viability of installing tanks. The objective of this study is to carry out cost effectiveness analysis to estimate the payback period, cost effectiveness ratio and the levelized cost of installing rainwater tanks in different geographical locations with significantly varying mean annual rainfall (MAR). The paper also focuses on the impact of the inflation rate, interest rate (discount rate), the period of analysis on the previously stated cost parameters and determines the optimum tank size based on the MAR of the location. The study showed that the payback period was as low as 14 years for a 5kL tank in an area where the MAR is around 1000 mm (discount rate of 10% and inflation rate of 4.2%). The payback period varied considerably with the tank size especially in low rainfall areas (MAR ≤ 450 mm). This emphasizes the importance of selecting the optimum tank size to ensure maximum use of the rainwater to maximize the return on the initial investment. Copyright Springer Science+Business Media B.V. 2011

Suggested Citation

  • Anirban Khastagir & Niranjali Jayasuriya, 2011. "Investment Evaluation of Rainwater Tanks," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(14), pages 3769-3784, November.
    • Handle: RePEc:spr:waterr:v:25:y:2011:i:14:p:3769-3784
    DOI: 10.1007/s11269-011-9883-1
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    References listed on IDEAS

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    1. Dima Nazer & Maarten Siebel & Pieter Van der Zaag & Ziad Mimi & Huub Gijzen, 2010. "A Financial, Environmental and Social Evaluation of Domestic Water Management Options in the West Bank, Palestine," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 24(15), pages 4445-4467, December.
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    Cited by:

    1. Gabriela Cristina Ribeiro Pacheco & Marcus André Siqueira Campos, 2019. "Real Options Analysis as an Economic Evaluation Method for Rainwater Harvesting Systems," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 33(12), pages 4401-4415, September.
    2. Morales-Pinzón, Tito & Lurueña, Rodrigo & Rieradevall, Joan & Gasol, Carles M. & Gabarrell, Xavier, 2012. "Financial feasibility and environmental analysis of potential rainwater harvesting systems: A case study in Spain," Resources, Conservation & Recycling, Elsevier, vol. 69(C), pages 130-140.
    3. Mokhtar Guizani, 2016. "Storm Water Harvesting in Saudi Arabia: a Multipurpose Water Management Alternative," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(5), pages 1819-1833, March.
    4. Rahman, Ataur & Keane, Joseph & Imteaz, Monzur Alam, 2012. "Rainwater harvesting in Greater Sydney: Water savings, reliability and economic benefits," Resources, Conservation & Recycling, Elsevier, vol. 61(C), pages 16-21.
    5. Xingqi Zhang & Maochuan Hu & Gang Chen & Youpeng Xu, 2012. "Urban Rainwater Utilization and its Role in Mitigating Urban Waterlogging Problems—A Case Study in Nanjing, China," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(13), pages 3757-3766, October.
    6. Aditi Mankad & Meng Chong & Ted Gardner & Ashok Sharma, 2012. "Examining Biophysical and Socio-Demographic Factors across Mandated Tank Users in Urban Australia: A Linking Step towards Achieving Best Practices," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(7), pages 1983-1998, May.
    7. Mokhtar Guizani, 2016. "Storm Water Harvesting in Saudi Arabia: a Multipurpose Water Management Alternative," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(5), pages 1819-1833, March.
    8. Enedir Ghisi & Pedro Schondermark, 2013. "Investment Feasibility Analysis of Rainwater Use in Residences," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(7), pages 2555-2576, May.
    9. Gabriel Yoshino & Lindemberg Fernandes & Júnior Ishihara & Adnilson Silva, 2014. "Use of rainwater for non-potable purposes in the Amazon," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 16(2), pages 431-442, April.
    10. C. Vialle & C. Sablayrolles & M. Lovera & M.-C. Huau & S. Jacob & M. Montrejaud-Vignoles, 2012. "Water Quality Monitoring and Hydraulic Evaluation of a Household Roof Runoff Harvesting System in France," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(8), pages 2233-2241, June.
    11. Deora, Shashank & Nanore, Gyanesh, 2019. "Socio economic impacts of Doha Model water harvesting structures in Jalna, Maharashtra," Agricultural Water Management, Elsevier, vol. 221(C), pages 141-149.
    12. C. Matos & I. Bentes & C. Santos & M. Imteaz & S. Pereira, 2015. "Economic Analysis of a Rainwater Harvesting System in a Commercial Building," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 29(11), pages 3971-3986, September.

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