Analysis of the Rainwater Harvesting Market including Trends and Challenges

April 2, 2019

Water Technologies Market Update

The continuous growth of the human population is raising demand for clean and fresh water and intensifying stress on already shrinking freshwater resources. Moreover, urbanisation, industrialisation, increase per capita water use due to increased living standards, water pollution and the effect of climate change also reduces the availability of freshwater. Growing water scarcity is a global concern and is one of the leading challenges for sustainable development. One of the solutions considered and progressively being implemented is rainwater harvesting systems.

The rainwater harvesting market was valued at $0.70 USD bn in 2016 and is projected to reach a value of $1.14 USD bn by 2025 at a CAGR of 5.70% from 2017 to 2025, according to a new Report published by Transparency Market Research (TMR) titled “Rainwater Harvesting Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2017–2025” (1).

Rainwater harvesting (RWH) is a simple and primary technique of collecting rainwater from hard surfaces to augment freshwater supplies. Harvested rainwater is commonly used for non-potable applications that encompass a large percentage of water use such as irrigation, toilet flushing, vehicle washing, cleaning, cooling, and industrial processes.

RWH has been practiced in various parts of the world through the ages since the third millennium BC (2), and many people today still rely on it where fresh water is limited. In more arid or drought-prone regions, rainwater is the most easily adaptable method to mitigate water scarcity.

In some countries like Japan, collecting and storing rainwater is a way to reduce vulnerability in emergencies such as earthquakes and severe flooding which can disrupt public access to clean water.

Rainwater harvesting market

Rainwater harvesting systems vary in scale and complexity. It can be as simple as a rain barrel for garden watering for a residential market or a large-scale, sophisticated treatment system for the commercial or industrial market.

Geographically, the rainwater harvesting market includes North America, Asia- Pacific, and Europe. In North America, the U.S. is driving the market for rainwater harvesting by its large market size. In the global scale, Pacific Asia has been reported to hold maximum market share in the rainwater harvesting industry and will remain the largest market as a result of raised awareness about the importance of water conservation and adaption of rainwater harvesting in commercial buildings(3).

Benefits of Rainwater that drives rainwater harvesting market growth

A critical driver in the rainwater harvesting market is the increase in water consumption due to population growth and industrialization. This rapidly increasing demand for clean water across the world drives the growth of the rainwater harvesting market which can be a creative and viable alternative to other municipal water sources. The harvested rainwater can be used for the applications that do not require potable quality water such as toilet flushing, irrigation, vehicle washing, etc.

Rainwater harvesting can be used as a strategy to delay expansion of municipal water treatment and distribution systems. Many existing urban water infrastructures are old and have limited capacity. The expansion and extension of the water supply infrastructure to meet the increasing demands is a significant long-term investment and presents an enormous engineering and social issue. Development of rainwater harvesting as a decentralized and distributed solution is seen as a sustainable alternative solution that can cut demand and reliance on municipal water grid and delay capital projects.

Rainwater harvesting is an essential component of many urban stormwater management strategies as well. It can play a role in addressing flood protection and water balance, especially if extreme weather events are frequent. Rainwater harvesting is well recognized as an important means to manage wet weather and improve water quality (5) by reducing the amount of stormwater runoff entering the storm sewer or combined sewer thereby reducing the risk of flooding.

Rainwater harvesting market trend

One of the key trends in rainwater harvesting is the emergence of smart cities and green building. Projects and buildings pursuing certification programs such as Leadership in Energy and Environmental Design (LEED), Green Globes, and the Living Building Challenge, can benefit from rainwater harvesting to reduce their potable usage and comply with their sustainability objectives.

In addition, rainwater harvesting has received increased attention by all levels of government in recent years which will simulate the demand for rainwater harvesting systems. In North America, many municipal, and regional agencies have amended and updated their regulations to address the need and growth of rainwater harvesting systems. More specifically, Building Codes are being updated to provide direction on responsible and effective rainwater harvesting system design. Some jurisdictions are involving health officials in the planning and approvals process to ensure public health and safety is satisfactorily addressed. Also, mandatory rainwater harvesting policies have been implemented in southwestern regions of the United States in response to water shortage.

Furthermore, several incentive programs for industries have been formed to encourage the adaption of rainwater harvesting across the globe. Governments and NGO’s in several countries have started awareness programs for promoting rainwater harvesting as a solution to water scarcity and water access. In India, China, Brazil, and Australia, the increasing use of RWH has occurred after enabling policies and legislation together with cost-sharing and subsidises for rainwater harvesting interventions to promote rainwater harvesting (6).

The challenges and factors of the Rainwater harvesting market

Designing treatment systems requires knowledge of treatment processes, technologies and how they perform given various levels and types of water quality. Similar to stormwater management plans, every potential project site is different and a ’cookie cutter’ approach to rainwater harvesting design is not appropriate. Selection of a treatment process that meets the water quality criteria for the intended use, design and sizing of efficient storage tanks that meets demand, compliance with log reduction targets and other regulatory requirements are important considerations when designing a rainwater harvesting system to guarantee approval for the intended usage (7).

Since the design knowledge varies across the board and standard of designs also vary from designer to designer, there is still a need for a regulatory framework to be created to evaluate designs and manage risk in a balanced manner. Building codes alone do not have the mechanism (or ability) to evaluate rainwater harvesting design and determine if the treatment system treats water that is fit for use.

The capital cost of RWH systems relatively depends on the size and the technology level. In addition to the cost of components, there is the cost of having the system installed. The most expensive part of a rainwater system is usually the cistern itself (8). Neither operation nor maintenance cost is generally significant, as most RWH systems do not require any chemical or biological treatment for the intended non-potable application. It is projected that the rainwater harvesting systems average price will decline in the next few years due to the technological advancements and lowering cost of raw materials (1).

Return on Investment (ROI) of RWH systems can vary depending on the rainwater harvesting system size, climatic conditions, potable water rates, etc. Longer payback period may be a barrier to the growth of the RWH market, especially in developing countries. However, technological advancements, streamlining and clarification of regulatory requirements and packaged modular rainwater harvesting systems will help to reduce the initial investment costs of rainwater harvesting systems and created an opportunity for growth.

Commercial buildings are reported to have a shorter payback period, as low as 3 years due to their higher potential for cost efficiency (9). Commercial buildings with large roof area can collect a considerable amount of rainfall.

Download the Guide to Budgeting for a Commercial Rainwater Harvesting System to better understand the cost and implications of such a complex system.

(1) Transparency Market Research, Rainwater Harvesting Market, 2018. Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2017–2025
(2) Mays, L.; Antoniou, G.P.; and, Angelakis, A.N. History of Water Cisterns: Legacies and Lessons. Water 2013, 5, 1916-1940
(3) Infinium Global Research, 2018. Rainwater harvesting Market – Growing Popularity and Emerging Trends in the Market 2024
(5) Ontario Ministry of Environment and Energy and Ontario Ministry of Natural Resources, 1991. Interim stormwater management quality control guidelines for new development.
(6) United State Environmental Protection Agency, 2013. Rainwater harvesting, Conservation, Credit, Codes, and Cost, Literature Review and Case Studies.
(7) San Francisco’s Non‑potable Water Program, 2018. A Guidebook for Implementing Onsite Water Systems in the City and County of San Francisco
(8) Abdulla, F.A. and Al-Shareef, A.W. Roof Rainwater Harvesting System for Household Water Supply in Jordan. Desalination,2009, 243, 195-207.
9) The Green Home Construction and Lifestyle, 2013. WHAT IS THE PAYBACK TIME FOR A RAINWATER HARVESTING SYSTEM?