economic analysis of a rainwater harvesting system in a … · 2016-10-04 · savings potential...

Economic Analysis of a Rainwater Harvesting Systemin a Commercial Building

C. Matos1,2 & I. Bentes1,2 & C. Santos4 & M. Imteaz3 &

S. Pereira1,2

Received: 8 November 2014 /Accepted: 27 May 2015 /Published online: 6 June 2015# Springer Science+Business Media Dordrecht 2015

Abstract This research evaluates which is the most cost-efficient rainwater harvesting (RWH)system in a new commercial building located in the north of Portugal, in Braga. Based on theeconomic analysis, the cost-efficiency of the presented RWH strategies may be considered forthe case studied.

The results of this research indicate that RWH scenarios proposed are cost-efficient.Considering a 10 % discount rate, the water price charge in the municipally of Braga andthe cost of the infrastructures would be enough to make RWH cost-efficient for this option. Atthis discount rate, the payback period ranges from 2 to 6 years and the internal rate of returnwould range from 23 to 76 %. If a discount rate of 5 % were considered, the payback periodswould be reduced by approximately 1 year.

Keywords Rainwater harvesting system . Commercial building . Economic analysis

1 Introduction

Water management is crucial since present water usage is far from being sustainable. Waterstress, that occurs when the demand for water exceeds the available amount during a certain

Water Resour Manage (2015) 29:3971–3986DOI 10.1007/s11269-015-1040-9

* C. [email protected]; http://www.utad.pt

1 Escola de Ciências e Tecnologia, Universidade de Trás-os-Montes e Alto Douro (UTAD),5000-801 Vila Real, Portugal

2 C-MADE- Centre of Materials and Building Technologies, University of Beira Interior,6201-001 Covilhã, Portugal

3 Department of Civil and Construction Engineering, Faculty of Science, Engineering and Technology,Swinburne University of Technology, Melbourne, Australia

4 Department of Civil Engineering, Faculdade de Engenharia da Universidade do Porto, Rua Dr.Roberto Frias, s/n, 4200-465 Porto, Portugal

http://crossmark.crossref.org/dialog/?doi=10.1007/s11269-015-1040-9&domain=pdf

period or when poor quality restricts its use (EEA. 2009), is a reality in many countries andclimate change will only accentuate the frequency and intensity of those events in the future,namely in southern European countries (EEA 2009), such as Portugal that has a high potentialof water resources, although not available to use due to inappropriate temporal and spatialdistributions. Besides, Portugal is already in the rank of countries with medium water stress(10–20 %) worsened by high values of water use inefficiency, mainly in agriculture and urbanareas (Melo-Batista 2002).

To reverse the non-sustainable tendency of increasing surface and groundwater extractionto satisfy the rising demand of water, some changes must be done. Rainwater harvesting(RWH) is presented as a sustainable strategy to be included in urban water cycle management.It presents many benefits, i.e. it may reduce a city’s external water demand and alleviate waterstress on the area by promoting significant potable water savings, reduce non-point sourcepollutant loads, reduce urban runoff volume, prevent flooding and help to alleviate climatechange (Farrency et al. 2011).

A RWH system, which collects runoff from the roof, generally consists of a catchment area(generally the roof area), a filter, a storage tank, a supply network, pipes and an overflow unit(Environmental Agency 2008). As a consequence, the principal operational parameters thataffect operational efficiency, in terms of economic feasibility, are the amount of rainfall, thecatchment area, tank volume, water demand, and the efficiency of runoff collection and thefilter (Mun and Han 2012).

Coombes and Kuczera (2003) found that for an individual building, with a 150 m2 roof areaand 1–5 m3 tank in Sydney, can return 10–58 % water savings, depending on the number ofpeople using the building (Imteaz et al. 2012). In Sweden, Villarreal and Dixon (2005)investigated water savings potential of RWH systems from roof areas and noted that a mainswater saving of 30 % can be achieved using a 40 m3 sized tank (toilet and washing machineend-use only) (Imteaz et al. 2012). In Brazil, it has already been reported that the potential forpotable water savings by using rainwater varies greatly depending on the geographic region,i.e., it varies from 48 % in the southeast region to 100 % in the north region (Ghisi et al. 2006).However, it is necessary to add that, although the supply capacity of rainwater be sufficient tomeet the total demand in households in this region, alternative water supply schemes are notalways suitable for potable water supply. Ghisi et al. (2007, 2009) investigated the watersavings potential from rainwater harvesting systems in Brazil and found that average potentialfor potable water savings to be 12–79 % per year for the cities analysed. Muthukumaran et al.(2011) found that use of rainwater inside a home in regional Victoria in Australia can save upto 40 % of potable water use (Imteaz et al. 2012).

The storage tank size is usually the largest factor of the total installation cost (Chilton et al.2000; Ghisi and Schondermark 2013; Khastagir and Jayasuriya 2011), hence its optimizationis essential to the feasibility and short payback of the system. A proper analysis and designbefore implementing these systems is important to improve their performance and amplify thebenefits and effectiveness (Imteaz et al. 2011; Mun and Han 2012). It is necessary to providecriteria for the spreading of RWH systems, taking into consideration that the proper applicationof economic principles to environmental problems is essential in order to identify andimplement the most cost-effective solutions (Corbitt 1998) and move towards economic andenvironmental sustainable strategies for urban water management (Farrency et al. 2011).

Normative and technical documents existing in Germany, UK and Portugal (ANQIP 2009;BSI 2009; fbr 2002) recommend the use of a “detailed approach” based on daily simulations ofthe system’s operation by using a model of yield and demand that considers a continuous daily

3972 C. Matos et al.

rainfall data corresponding to a time series from 3 to 10 years. However, the criteria tocalculate the tank size using this approach is not referred, leading to the necessity to simulateseveral scenarios in order to obtain the storage volume that leads to an efficient and feasiblesystem (Santos and Taveira-Pinto 2013).

In this paper it is presented the economic analysis of a RWH system of a big commercialsurface (Dolce Vita Braga), in Braga – Portugal, studying various scenarios of regularizationand end-uses demand, analysing the economic feasibility and potential decrease of reliance oncentralised water supply systems, which follow from these scenarios.

2 Case Study

This study relies on a commercial building, Dolce Vita Braga that is a new structure located in thenorth of Portugal, in Braga. This shopping centre (Fig. 1) includes several distinct but complemen-tary areas, namely a shopping areawith commercial and a retail area spaces, restaurants, leisure areasand a supermarket. The intervention area available for the project is 159.971m2, and the footprint ofthe whole commercial area is 46.611 m2, for a gross floor area of 90.000 m2. Structurally, thecommercial building is distributed on three floors. The retail units are on a single floor, supported bya public parking spread over four floors. Overall, the business will be associated with a grossleasable area of 75.000m2, corresponding to 165 units, whichwill be allocated to different activities.There will be a total parking area of 62.000 m2, distributed over four basements and outer surfaceparking places, corresponding to 2.750 car parking spaces.

Matos et al. (2014), studied several scenarios of non-potable uses for rainwater harvesting,sizing the rainwater storage tank of commercial area with a big collection roof surface,considering the different possibilities of rainwater use and different periods of regularization(1 year and 7 months regularization). Regularization period is the time-interval wherein the

Fig. 1 Dolce Vita Braga (Source: http://www.dolcevita.pt)

Economic Analysis of a Rainwater Harvesting System 3973

http://www.dolcevita.pt/

average flow rate used is constant and equal to the average influent flow. In most cases, theinflow and the consumption laws are not constant so, according with the law of consumption,the existence of a reservoir with a capacity equal to the maximum difference between theinflow and the consumption is necessary, so that the adjustment period considered all thetributary flow can be consumed with no failures in consumption. The total use of the rainwatercollected on the roof or the complete non-potable supply with rainwater are not the mostreasonable solutions to size a rainwater tank, leading to very large storage tanks with highinstallation costs. The non-potable uses implied different inputs in the rippl method andtherefore there will be several possibilities for the volume of the storage tank. These investi-gators presented the three more realistic scenarios in terms of volume of the storage tank, aswell as the potential water savings arising from these scenarios, that are presented in Table 1.

Based on this results this paper will present the economic analysis of the various scenariospresented (for 7 months regularization).

The conceptual design of infrastructures has been executed with the aid of expert compa-nies in the field. For each system, the inventory of materials and works has been obtained anddivided into two subsystems: storage and distribution. The sizing of piping system, pumps andthe choice of the materials to be used was made by the in charge team of Dolce Vita. Theselection of the storage tank has been made with the aid of expert companies in the field.

3 Methods

To perform the economic analysis of the RWH system it wasmade an estimative of the investmentrequired for its implementation and of the benefits that it will bring, as well as the study of the NetPresent Value (NPV), Payback Period (PB) and Internal Rate of Return (IRR) for each scenario.

3.1 Costs

In terms of investments it was considered the storage tank and its fixtures, the alternative watersupply net and the pump. The project owner required that the RWH tank was undergroundedin order to improve the environmental visual impact of its installation. To know the cost ofhorizontal polyethylene RWH tank and its fixtures it was made a market consultation to theRWH installation companies and was based on their total volume. These companies haveindicated that the cost of the fixtures is typically 30 % of the reservoir.

Table 1 Summary of the results found (Matos et al. 2014)

End uses Scenario 2 Scenario 11 Scenario 13

Washing parking floors;garden irrigation

50 % toilet flush;garden irrigation

Toilet flush; 5 %garden irrigation

Volume of the storage tank(annual regularization) (m3)

7.277,29 9.299,20 10.154,33

Volume of the storage tank(7 months regularization) (m3)

11,63 324,63 252,39

Consumption (m3/month) 3.302,20 3.615,20 3.726,49

Savings in public drinking water(€/month)

4.833,99 5.295,20 5.458,45


The data for the water supply net was specified by the owner. This alternative network, for therainwater distribution will have the same length and diameters of the original water supplynetwork. The unit rate applied to construction pipe reticulation systems were based on theirrespective diameter, material, construction method, depth, as well as adjustment factors related tosoil type, dewatering and scale factor (length of pipes constructed under a single work/project).The pump costs was given by the suppliers, based on their power rate. Usually the installation costrepresent 25 % of the pump cost. The total investment is given by the sum of these partial costs.

3.2 Benefits of RWH

The primary financial benefit will be a reduction in the annual water bill from local waterauthorities. This annual revenue is calculated as the savings related to the substitution of mainwater for rainwater. Thus, the price of pipe water supply and the amount of rainwater delivered(Rd) are considered. It needs to be highlighted that the costs related to water supply and to thesewage system are considered, since once the water is used it will also end up to the sewagesystem (independent of the original supply source).

The potential savings estimation was made by consulting the company for water supply ofthe city of Braga (Table 2).

3.3 Economic Assessment of the RWH

The economic assessment of the RWHwas made using the calculations of the Net Present Value(NPV), the payback period (PB) and the Internal Rate of Return (IRR). The NPVanalysis methodis one of the most commonly used tools to determine the current value of future investments(Ruegg and Marshall 1990). The NPV provides a robust rationale for asset management as itconsiders the installation and operational costs over extended periods of time. In this analysis, theconsidered associated costs of RWH systems, are balanced against some benefits (such asreduction in mains supply charges). The NPVanalysis requires a rate at which costs and benefitsare reduced over time, known as the discount rate or interest rate (Ruegg and Marshall 1990).

According to the publicationGuide to cost-benefit analysis of investment projects (EuropeanCommission, Directorate General Regional Policy 2008) in Europe, the discount rate (i) usedfor cost benefits studies in Portugal is in average 6 % not including the inflation rate, for thiswork a discount rate of 5% and 10 % was used to take in account some uncertainty. And theevaluation period (t) for this type of projects is assumed to be approximately 20 years. It was theone used in this work, and also adopted by Farrency et al. (2011) and Yan Zhang et al. (2009).


Table 2 Water tariff for non-domestic consumption in the mu-nicipality of Braga (Agere -empresa de águas, efluentes eresíduos de Braga 2013)

Classes (m3) €/m3

1º Class - 0 a 30 0,88

2º Class - 31 a 60 1,25

3º Class - >60 1,38

Rate of water resources €/m3

Sanitation 0,0101

Water 0,0205

Rate connection sanitation (€/month)

Building not intended for housing(area greater than 100 m2)

3,89

3.3.1 Net Present Value (NPV)

The net present value (NPV) is the sum of Cash Flows (difference between cash outflows andcash inflows of the investments made in each period of the investment life) discounted at agiven rate. Not more than the return that investors require to implement an investment projectand will serve to update the cash flows generated by the same, corresponding to a givendiscount factor of money over time.

For the NVP was used the following expression:

NVP i;Nð Þ ¼X N

t¼0

Rt

1þ ið Þt ð1Þ

Where:

Rt − Cash Flow;i − Interest rate / discount rate;t − Number of years of the project.

3.3.2 Internal Rate of Return (IRR)

The Internal Rate of Return (IRR) is the maximum rate of return on the project. Not more thanthe update rate, at the end of the of the project life. It is the interest rate (IRR) that, for the totallifetime of the project, equals the NPV to zero.

To determine the IRR, was used the following expressions:

NPV ¼X N

t¼0

Rt

1þ IRRð Þt ¼ 0 ð2Þ

The calculation of the IRR is done by an iterative process of successive approximations.Was used Microsoft Excel © to determine that rate.

3.3.3 Payback Period (PB)

The payback period, which is the time that a project is expected to take in order to earn netrevenue equal to the capital cost of the project, has also been calculated within the discountperiod. It is measured as the ratio between total capital costs and the difference between annualrevenue and annual expenditures, taking into account the discount rate.

The PB’s method has the disadvantage of not taking into account the cash flows generatedafter recovered the capital invested, which makes it inadvisable to assess long-term projects.

To determine the PB, it was used the following expression:

PB ¼ pþ Rp

Rp−Rpþ1ð3Þ

Where:

p − time (years) immediately before the accumulated cash flow becomes positive;Rp − Cash flow accumulated in period p;Rp+1 − Cash flow accumulated in period p +1.


Tab

le3

Costsof

theelem

entsincluded

intheRWH

infrastructures

Item

[unitsof

measurementsin

brackets]

Scenario

2Costexpressedin

€11

Costexpressedin

€13

Costexpressedin

€

Storage

Pre-fabricatedtank

Polyestertank

with

filter

(including

excavatio

n)[u]

1(M

odelTH

-15.500

I)5.220,00

7(M

odelTH

-47.700

I)110.040,00

6(M

odelTH

-47.700

I)94.320,00

Estim

ationaccessories

(30%

ofthecostof

thetank)[vg]

1.566,00

33.012,00

28.296,00

Distribution

Pumping

station

Pump[u]

1(W

ilo-COR-2

MHIE

406/VR-EB)

8.300,00

1(W

ilo-COR-2

MHIE

406/VR-EB)

8.300,00

1(W

ilo-COR-2

MHIE

406/VR-EB)

8.300,00

Estim

ationof

thecostof

installatio

n(25%)[vg]

2.075,00

2.075,00

2.075,00

Distributionsystem

Cleaningof

floorsof

parkinglots

(D32

mm)[m

]300

1,980,00

150

990,00

(D50

mm)[m

]

(D63

mm)[m

]

(D110mm)[m

]

(D125mm)[m

]520

24.804,00

260

12.402,00

Gardenirrigatio

n

(D23

mm)[m

]1800

11.880,00

1800

11.880,00

(D65/50mm)[m

]1000

19.120,00

1000

19.120,00

(D125mm)[m

]


Tab

le3

(contin

ued)

Item

[unitsof

measurementsin

brackets]

Scenario

2Costexpressedin

€11

Costexpressedin

€13

Costexpressedin

€

Toiletflush

(D32

mm)[m

]50

518,00

100

1.036,00

(D65

mm)[m

]50

713,00

100

1.425,00

(D110mm)[m

]250

10.150,00

500

20.300,00

Total

74.945,00

195.808,00

146.383,00

Taxes(23%)

92.120,00

240.843,00

180.051,09


4 Results

In the following sections are presented the results found in the present work.

4.1 Costs

The calculated costs for this study are presented in Table 3. As it can be seen the storage tank isthe element that has the major cost in the installation. In scenarios 2 and 11, has it is preview an

Table 4 Application of the water tariff for non-domestic consumption in the municipality of Braga to Scenario 2

Scenario

Pavement washing classes (€/m3) Quantity (m3) Price (€/m3) Total (€) Taxes (6 %) Total + Taxes (€)

1º Class - 0 a 30 30,00 0,88 26,40 1,58 27,98

2º Class - 31 a 60 30,00 1,25 37,50 2,25 39,75

3º Class - >60 1.240,00 1,38 1.628,40 97,70 1.726,10

Rate of water resources (€/m3)

Sanitation 1.240,00 0,01 12,52 0,75 13,28

Water 1.240,00 0,02 25,42 1,53 26,95


Building not intended forhousing (area greaterthan 100 m2)

1,00 3,89 3,89 0,23 4,12

1 month 1.734,13

7 month 12.138,94

+taxes 1 month 1.838,18

7 month 12.867,27

Garden irrigation classes (€/m3) Quantity (m3) Price (€/m3) Total (€) Taxes (6 %) Total + Taxes (€)

1º class - 0 a 30 30,00 0,88 26,40 1,58 27,98

2º class - 31 a 60 30,00 1,25 37,50 2,25 39,75

3º class - >60 2.002,20 1,38 2.763,04 165,78 2.928,82


Sanitation 2.062,20 0,01 20,83 1,25 22,08

Water 2.062,20 0,02 42,28 2,54 44,81


Building not intended forhousing (area greater than100 m2)

1,00 3,89 3,89 0,23 4,12

1 month 2.893,93

7 month 20.257,51


7 month 21.472,96

Total 1 month 4.628,06

7 month 32.396,44

Total + Taxes 1 month 4.905,75

7 month 34.340,23


irrigation network, the distribution net cost is substantial. In scenario 13 although the storagetank cost is high, the distribution net is lower.

4.2 Benefits

The benefits consist basically on the drinking water savings of the public water network. Assaid, to be able to estimate the economic savings of public drinking water in the area of Braga,the public company responsible for the distribution network was consulted (Tables 4, 5 and 6).


Scenario 11

50 % toilet flush classes (€/m3) Quantity (m3) Price (€/m3) Total (€) Taxes (6 %) Total + Taxes (€)

1º Class - 0 a 30 30,00 0,88 26,40 1,58 27,98

2º Class - 31 a 60 30,00 1,25 37,50 2,25 39,75

3º Class - >60 1.493,00 1,38 2.060,34 123,62 2.183,96


Sanitation 1.553,00 0,01 15,69 0,94 16,63

Water 1.553,00 0,02 31,84 1,91 33,75



1,00 3,89 3,89 0,23 4,12

1 month 2.175,65

7 month 15.229,56


7 month 16.143,34

Garden irrigation classes (€/m3) Quantity (m3) Price (€/m3) Total (€) Taxes (6 %) Total + Taxes (€)

1º class - 0 a 30 30,00 0,88 26,40 1,58 27,98

2º class - 31 a 60 30,00 1,25 37,50 2,25 39,75

3º class - >0 2.002,20 1,38 2.763,04 165,78 2.928,82


Sanitation 2.062,20 0,01 20,83 1,25 22,08

Water 2.062,20 0,02 42,28 2,54 44,81



1,00 3,89 3,89 0,23 4,12

1 month 2.893,93

7 month 20.257,51


7 month 21.472,96


7 month 37.616,29


7 month 37.616,29


Scenario 13 is the one that implies more benefits in water savings, followed by scenario 11and finally scenario 2.

4.3 Economic Assessment of the RWH

An economic assessment of the three scenarios of RWH was performed. In Tables 7,8 and 9 are showed, with more detail, the results of NPV, PB and IRR for scenario 2,as an example. For the other two scenarios de major conclusions are showed inTable 11 and then discussed.


Scenario 13

50 % pavement washing (€/m3) Quantity (m3) Price (€/m3) Total (€) Taxes (6 %) Total + Taxes (€)

1º Class - 0 a 30 30,00 0,88 26,40 1,58 27,98

2º Class - 31 a 60 30,00 1,25 37,50 2,25 39,75

3º Class - >60 3.045,99 1,38 4.203,47 252,21 4.455,67


Sanitation 3,105,99 0,01 31,37 1,88 33,25

Water 3,105,99 0,02 63,67 3,82 67,49



1,00 3,89 3,89 0,23 4,12

1 month 4.366,30

7 month 30.564,10


7 month 32.397,94

Toilet flush classes (€/m3) Quantity (m3) Price (€/m3) Total (€) Taxes (6 %) Total + Taxes (€)

1º class - 0 a 30 30,00 0,88 26,40 1,58 27,98

2º class - 31 a 60 30,00 1,25 37,50 2,25 39,75

3º class - >60 650,00 1,38 772,80 46,37 819,17


Sanitation 620,00 0,01 6,26 0,38 6,64

Water 620,00 0,02 12,71 0,76 13,47



1,00 3,89 3,89 0,23 4,12

1 month 859,56

7 month 6.016,93

+taxes 1 month 911,14

7 month 6.377,95


7 month 38.775,89


7 month 38.775,89


In Table 7 are the results, of the economic assessment of the RWH for scenario 2, withinterest rate of 10 %. As showed, for a discount rate of 10 % the expected NPV is 233 M€. ThePB is approximately 1 year and a half.

As indicated in Table 8, if a discount rate of 5 % is considered the expected NPV is 361 M€.The PB is similar to the presented before.

An IRR of 76 % is a good indicator (Table 9). The margin for the discount rate is very largeconsidering that, in this type of investment projects, the average for this rate is 11% (delta of 65%).

Table 10 shows the size of the tank for each system, as well as the water savings and theoverall efficiency, according to the water balance on a daily basis.

For approximately the same volume of precipitation and consumptions, with water savingsrounding the 20 %, the scenario 2 leads to a smaller tank capacity that may indicate that thismay be the better scenario in terms of investment (normally the tank volume is the cost withmore impact in the final results). But leads to 18 % of water savings against 23 % of scenario11 or 20 % of scenario 13.

Finally, on Table 11 are presented the financial results for the RWH systems.For scenario 11, with an interest rate of 10 %, the expected NPV is 162 M€. The PB

is approximately 6 years. If a discount rate of 5 % is considered the expected NPV is311 M€. The PB is approximately 4 years. An IRR of 23 % is a good indicator,

Table 7 Economic assessment of the RWH for Scenario 2 with interest rate of 10 %

Year Interest rate i=10 % Present cashflow

Payback period (PB) = 1 year5 month and 26 days

Accumulated cashflow

Investments / costs Benefits 1/i Updated cash flow

0 74.0945,00 € 32.396,44 € 42.548,56 € 1,000 42.548,56 € 42.548,56 €

1 32.396,44 € 32.396,44 € 0,9091 29.451,31 € 13.097,24 €

2 32.396,44 € 32.396,44 € 0,8264 26.773,92 € 13.016,68

3 32.396,44 € 32.396,44 € 0,7513 24.339,93 € 38.676,60 €

4 32.396,44 € 32.396,44 € 0,6830 22.127,21 € 60.143,81 €

5 32.396,44 € 32.396,44 € 0,6209 20.115,64 € 80.259,45 €

6 32.396,44 € 32.396,44 € 0,5645 18.286,95 € 98.546,40 €

7 32.396,44 € 32.396,44 € 0,5132 16.624,50 € 115.170,90 €

8 32.396,44 € 32.396,44 € 0,4665 15.113,18 € 130.284,08 €

9 32.396,44 € 32.396,44 € 0,4241 13.739,25 € 144.023,33 €

10 32.396,44 € 32.396,44 € 0,3855 12.490,23 € 156.513,56 €

11 32.396,44 € 32.396,44 € 0,3505 11.354,76 € 167.868,32 €

12 32.396,44 € 32.396,44 € 0,3186 10.322,51 € 178.190,82 €

13 32.396,44 € 32.396,44 € 0,2897 9.384,10 € 187.574,92 €

14 32.396,44 € 32.396,44 € 0,2633 8.531,00 € 196.105,92 €

15 32.396,44 € 32.396,44 € 0,2394 7.755,45 € 203.861,37 €

16 32.396,44 € 32.396,44 € 0,2176 7.050,41 € 210.911,78 €

17 32.396,44 € 32.396,44 € 0,1978 6.409,46 € 217.321,24 €

18 32.396,44 € 32.396,44 € 0,1799 5.826,79 € 223.148,02 €

19 32.396,44 € 32.396,44 € 0,1635 5.297,08 € 228.445,10 €

20 32.396,44 € 32.396,44 € 0,1486 4.815,52 € 233.260,63 €


although it is not so high than the preview scenario. The margin for the discount rate isstill large (delta of 12 %).

For scenario 13, with an interest rate of 10 %, the expected NPV is 200 M€. The PB isapproximately 4 years. If a discount rate of 5 % is considered the expected NPV is 353 M€.The PB is approximately 4 years. An IRR of 30 % continue to be a good indicator, higher thanthe preview scenario, although it is not so high than the scenario 2. The margin for the discountrate is still large (delta of 19 %).

As presented scenario 2 is the one that presents the highest NPV, although the difference toscenario 13 is not so big. In any case, scenario 2 also showed the lowest PB and the higherIRR, making it the selected scenario for this investment.

The economic assessment also corroborates that scenario 2 is the most interesting in termsof the tank volume and water savings.

5 Conclusions

This research evaluates which is the most cost-efficient rainwater harvesting (RWH) strategy ina new commercial building located in the north of Portugal, in Braga. The use of the rainwater

Table 8 Economic assessment of the RWH for Scenario 2 with interest rate of 5 %

Year Interest rate i=5 % Present cashflow

Payback period (PB) = 1 year4 month and 23 days

Accumulated cashflow

Investments / costs Benefits 1/i Updated cash flow

0 74.0945,00 € 32.396,44 € 42.548,56 € 1,000 42.548,56 € 42.548,56 €

1 32.396,44 € 32.396,44 € 0,9524 30.853,76 € 11.694,80 €

2 32.396,44 € 32.396,44 € 0,9070 29.384,53 € 17.689,73

3 32.396,44 € 32.396,44 € 0,8628 27.985,27 € 45.674,99 €

4 32.396,44 € 32.396,44 € 0,8227 26.652,63 € 72.327,63 €

5 32.396,44 € 32.396,44 € 0,7835 25.383,46 € 97.711,09 €

6 32.396,44 € 32.396,44 € 0,7462 24.174,72 € 121.885,81 €

7 32.396,44 € 32.396,44 € 0,7107 23.023,55 € 144.909,36 €

8 32.396,44 € 32.396,44 € 0,6768 21.927,19 € 166.836,55 €

9 32.396,44 € 32.396,44 € 0,6446 20.883,04 € 187.719,58 €

10 32.396,44 € 32.396,44 € 0,6139 19.888,61 € 207.608,19 €

11 32.396,44 € 32.396,44 € 0,5847 18.941,53 € 226.549,72 €

12 32.396,44 € 32.396,44 € 0,5568 18.039,55 € 244.589,27 €

13 32.396,44 € 32.396,44 € 0,5303 17.180,53 € 261.769,80 €

14 32.396,44 € 32.396,44 € 0,5051 16.362,41 € 278.132,20 €

15 32.396,44 € 32.396,44 € 0,4810 15.583,24 € 293.715,45 €

16 32.396,44 € 32.396,44 € 0,4581 14.841,18 € 308.556,63 €

17 32.396,44 € 32.396,44 € 0,4363 14.134,46 € 322.691,09 €

18 32.396,44 € 32.396,44 € 0,4155 13.461,39 € 336.152,48 €

19 32.396,44 € 32.396,44 € 0,3957 12.820,37 € 348.972,85 €

20 32.396,44 € 32.396,44 € 0,3769 12.209,88 € 361.182,73 €


in periods in which it is available involves small tanks to the RWHS, which causes a higheconomic viability for these systems. This type of partial regularization precludes the use ofrainwater for purposes where the needs are bigger in dry periods, like gardens irrigation, butcan be highly attractive for other uses, since the price charged for drinking water is always thesame regardless of the time of year.

Based on the economic analysis, the cost-efficiency of the presented RWH strategies maybe considered for the case studied.

The results of this research indicate that RWH scenarios proposed are cost-efficient.Considering a 10 % discount rate, the water price charge in the municipally of Braga and

Table 9 Internal rate of return calculation for Scenario 2

Year IRR=76 % Present cash flow 1/i Updated cash flow Accumulatedcash flow

Investements / costs Benefits

0 74.945,00 € 32.396,44 € 42.548,56 € 1,0000 42.548,56 € 42.548,56 €

1 32.396,44 € 32.396,44 € 0,5677 18.392,54 € 24.156,01 €

2 32.396,44 € 32.396,44 € 0,3223 10.442,06 € 13.713,95 €

3 32.396,44 € 32.396,44 € 0,1830 5.928,31 € 7.785,65 €

4 32.396,44 € 32.396,44 € 0,1039 3.365,70 € 4.419,95 €

5 32.396,44 € 32.396,44 € 0,0590 1.910,82 € 2.509,13 €

6 32.396,44 € 32.396,44 € 0,0335 1.084,84 € 1.424,29 €

7 32.396,44 € 32.396,44 € 0,0190 615,90 € 808,40 €

8 32.396,44 € 32.396,44 € 0,0108 349,67 € 458,73 €

9 32.396,44 € 32.396,44 € 0,0061 198,52 € 260,21 €

10 32.396,44 € 32.396,44 € 0,0035 112,70 € 147,51 €

11 32.396,44 € 32.396,44 € 0,0020 63,99 € 83,52 €

12 32.396,44 € 32.396,44 € 0,0011 36,33 € 47,20 €

13 32.396,44 € 32.396,44 € 0,0006 20,62 € 26,57 €

14 32.396,44 € 32.396,44 € 0,0004 11,71 € 14,86 €

15 32.396,44 € 32.396,44 € 0,0002 6,65 € 8,22 €

16 32.396,44 € 32.396,44 € 0,0001 3,77 € 4,44 €

17 32.396,44 € 32.396,44 € 0,0001 2,14 € 2,30 €

18 32.396,44 € 32.396,44 € 0,0000 1,22 € 1,08 €

19 32.396,44 € 32.396,44 € 0,0000 0,69 € 0,39 €

20 32.396,44 € 32.396,44 € 0,0000 0,39 € 0,00 €

Table 10 Results for the RWH systems

Scenario

2 11 13

Tank capacity (m3) 11,63 324,63 252,39

Volume of precipitation (annual m3) 28.099,19 32.664,75 32.664,75

Consumption (m3 / 7 month) 23.115,40 25.306,40 26.085,43

Water savings (%) 18 % 23 % 20 %


the cost of the infrastructures would be enough to make RWH cost-efficient for this option. Atthis discount rate, the payback period would be 2 years for scenario 2 (pavement washing andgarden irrigation), 6 years for scenario 11 (50 % toilet flush and garden irrigation) and 5 yearsfor scenario 13 (toilet flush and 50 % pavement washing) and the internal rate of return wouldbe 76, 23 and 30 % respectively. If a discount rate of 5 % were considered, the payback periodswould be reduced by approximately 1 year. Therefore, the scenario 2 is more cost-efficientthan the other two.

This cost–benefit analysis considers the savings of mains water as the only benefit of RWHsystems. It were not taken in account the maintenance costs, but also were not accounted theenvironmental, social, financial and energy saving benefits. The environmental benefits are soimportant that in the Guide to cost-benefit analysis of investment projects (2008) the discountrate is expected to be very low, or even negative, although in Portuguese reality this may beconsidered a potential risk. As mentioned above, the standard financial discount rate is 5–6 %real, and the return for the beneficiary should, in principle, be aligned with this benchmark.

Acknowledgments The authors are grateful to Eng. Helder Ferreira, an ex-student from University of Trás-os-Montes and Alto Douro and to Dolce Vita Braga shopping centre for all the support in many aspects of thisresearch.

References

Agere - empresa de águas, efluentes e resíduos de Braga (2013) http://www.agere.pt/web1/zp/tpl1/id1/paginas/ficha.asp?p_case=2&p_cod_elemento=91

ANQIP (2009) ETA 0701 - Sistemas de Abastecimento de Águas Pluviais em Edifícios (SAAP) (in portuguese):Portuguese National Association for Quality in Building Services - ANQIP, Version 7

BSI (2009) BS 8515:2009 rainwater harvesting systems - code of practice. British Standard Institution. ReinoUnido, UK

Chilton JC, Maidment GG, Marriott D, Francis A, Tobias G (2000) Case study of a rainwater harvesting systemin a commercial building with a large roof. Urban Water 1(4):345–354

Coombes P, Kuczera G (2003) Analysis of the performance of rainwater tanks in Australian capital cities. 28thInternational Hydrology and Water Resources Symposium, Wollongong, NSW, Australia

Corbitt RA (1998) Standard handbook of environmental engineering, 2nd edn. McGraw-Hill, New YorkEEA (2009) EEA signals 2009: key environmental issues facing Europe. European Environment Agency.

Copenhagen. 38 pp. ISBN 978-92-9167-391-9Environmental Agency UK (2008) Harvesting rain water for domestic uses: an information guide

Table 11 Financial results for the RWH strategies (20 years)

Scenario

2 11 13

NPV at i=5 % (€) 361.182,73 € 310.590,43 € 375.626,22 €

PB (years) 2 5 4

NPV at i=10 % (€) 233.260,63 € 162.056,99 € 222.513,92 €

PB (years) 2 6 5

IRR (%) 76 % 23 % 30 %

Abbreviations: i stands for ‘discount rate’, NPV stands for Net Present Value, PB stands for Pay Back Period, IRRstands for Internal Rate of Return


http://www.agere.pt/web1/zp/tpl1/id1/paginas/ficha.asp?p_case=2&p_cod_elemento=91

http://www.agere.pt/web1/zp/tpl1/id1/paginas/ficha.asp?p_case=2&p_cod_elemento=91

European Commission, Directorate General Regional Policy, Guide to COST-BENEFIT ANALYSIS of invest-ment projects Structural Funds, Cohesion Fund and Instrument for Pre-Accession 2008, http://ec.europa.eu/regional_policy/sources/docgener/guides/cost/guide2008_en.pdf

Farrency R, Gabarrell X, Rieradevall J (2011) Cost-efficiency of rainwater harvesting strategies in denseMediterranean neighbourhoods. Resour Conserv Recycl 55:686–694

fbr (2002) Translation of DIN 1989–1:2001–10. Rainwater harvesting systems – Part 1: Planning, installation,operation and maintenance. Fachvereinigung Betriebs - und Regenwassernutzung e.V. Darmstadt, Germany.34 pp

Ghisi E, Tavares DF, Rocha VL (2009) Rainwater harvesting in petrol stations in Brasilia: potential for potablewater savings and investment feasibility analysis. Resour Conserv Recycl 54:79–85

Ghisi E, Schondermark PN (2013) Investment feasilibility analysis of rainwater use in residences. Water ResourManag 27:2555–2576. doi 10.1007/s11269-013-0303-6. http://publications.environment-agency.gov.uk/pdf/GEHO0108BNPN-E-E.pdf (accessed 10.11.10).

Ghisi E, Montibeller A, Schmidt RW (2006) Potential for potable water savings by using rainwater: an analysisover 62 cities in southern Brazil. Build Environ 41(2):204–10

Ghisi E, Bressan DL, Martini M (2007) Rainwater tank capacity and potential for potable water savings by usingrainwater in the residential sector of southeastern Brazil. Build Environ 42(4):1654–66

Imteaz MA, Shanableh A, Rahman A, Ahsan A (2011) Optimisation of rainwater tank design from large roofs: acase study in Melbourne, Australia. Resour Conserv Recycl 55(11):1022–9

Imteaz MA, Adeboye O, Rayburg S, Shanableh A (2012) Rainwater harvesting potential for southwest Nigeriausing daily water balance model. Resour Conserv Recycl 62:51–55. doi:10.1016/j.resconrec.2012.02.007

Khastagir A, Jayasuriya N (2011) Investment evaluation of rainwater tanks. Water Resour Manag 25:3769–3784.doi:10.1007/s11269-011-9883-1

Matos C, Santos C, Pereira S, Bentes I, Imteaz M (2014) Rainwater storage tank sizing: case study of acommercial building. Int J Sustain Built Environ. doi:10.1016/j.ijsbe.2014.04.004

Melo-Batista J (2002) A melhoria da eficiência do uso eficiente da água como contributo para a sustentabilidadedos recursos naturais 10 Encontro Nacional de Saneamento Básico: Uso sustentável da água: situaçãoportuguesa e perspectivas de futuro

Mun JS, Han MY (2012) Design and operational parameters of a rooftop rainwater harvesting system: definition,sensitivity and verification. J Environ Manage 93:147–153

Muthukumaran S, Baskaran K, Sexton N (2011) Quantification of potable water savings by residential waterconservation and reuse—a case study. Resour Conserv Recycl 55:945–52

Ruegg RT, Marshall HE (1990) Building economics—theory and pratice. Van Nastrand Reinhold, New YorkSantos C, Taveira-Pinto F (2013) Analysis of different criteria to size rainwater storage tanks using detailed

methods. Resour Conserv Recycl 71:1–6Villarreal EL, Dixon A (2005) Analysis of a rainwater collection system for domestic water supply in

Ringdansen, Norrkoping, Sweden. Build Environ 40:1174–1184Zhang Y, Chen D, Chen L, Ashbolt S (2009) Potencial for rainwater use in high-rise buildings in Australian

cities. J Environ Manage 91:222–226


http://ec.europa.eu/regional_policy/sources/docgener/guides/cost/guide2008_en.pdf

http://ec.europa.eu/regional_policy/sources/docgener/guides/cost/guide2008_en.pdf

http://dx.doi.org/10.1007/s11269-013-0303-6

http://publications.environment-agency.gov.uk/pdf/GEHO0108BNPN-E-E.pdf

http://publications.environment-agency.gov.uk/pdf/GEHO0108BNPN-E-E.pdf

http://dx.doi.org/10.1016/j.resconrec.2012.02.007

http://dx.doi.org/10.1007/s11269-011-9883-1

http://dx.doi.org/10.1016/j.ijsbe.2014.04.004

economic analysis of a rainwater harvesting system in a … · 2016-10-04 · savings potential...

Documents