Capacity Optimization of Rainwater Harvesting Systems Based on a Cost–Benefit Analysis: A Financial Support Program Review and Parametric Sensitivity Analysis

Abstract

Water risk has been continuously rising due to climate change and ownership disputes of water resources. Dam construction to secure water resources may lead to environmental problems and upstream immersion. On the other hand, rainwater harvesting systems can effectively supply water at a low cost, although economic efficiency of these systems is still debatable. This study evaluates financial support programs to promote installation of rainwater harvesting systems, increasing economic feasibility. Based on a cost–benefit analysis, capacity optimization methods are further suggested. A sensitivity analysis is performed to determine the relative importance among uncertain parameters such as inflation and discount rates. In doing so, priority factors to consider in the design of rainwater harvesting systems are ultimately identified. A net present value, although it is sensitive to the inflation rate, is shown to be more appropriate to estimate the economic efficiency of rainwater harvesting system, compared to the typical cost–benefit ratio. Because the high future value overestimates the economic feasibility of rainwater harvesting systems, proper inflation rates should be applied. All in all, a funding program to promote rainwater harvesting systems significantly increases the benefits. Thus, national financial support policies are recommended to ensure economic feasibility of rainwater harvesting systems.

Keywords

• rainwater harvesting
• capacity
• cost–benefit analysis
• net present value