Water conservation not only benefits the environment but also is a sound business practice. In many cases, application of even simple, common sense conservation techniques can yield payback periods of one year or less.
Use of the payback method for assessing the feasibility of upgrading water efficiency does not always tell the whole story. It often underestimates the benefits of water efficiency over the lifetime of a measure, particularly when taking into account potential energy cost reductions and reduced maintenance costs from not having to heat as much water for certain applications. Lower wear and tear due to water efficiency may also extend the life of equipment such as boilers, heat exchangers and pumps.
The economic benefit of efficient water use is apparent when a lifecycle costing (LCC) exercise is carried out. LCC allows a potential renovator to estimate the net benefits of an efficiency investment, over the lifetime of the measure or product. It includes the costs of initial equipment purchase, operating and maintenance costs, fuel costs, the costs of inflation and disposal, and the cost of money over time.
The integration of water efficiency into renovation projects takes into account the 'true costs' of water. The true cost of water refers to all the costs that go into producing the clean water we use. It includes the capital and operational costs of potable water treatment plants, sewage treatment plants and the entire infrastructure required for delivery and disposal of water and its waste products. It excludes government funding and subsidies.
Up front costs are often seen as a barrier to implementing water efficiency improvements. What some managers fail to realize is that often the additional cost of upgrading to a water efficient fixture is not significant (often less than 30%) when savings in operating costs are considered. Applying water efficiency measures can quickly offset costs that seem to be prohibitive.