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Water-Harvesting Financial Incentives & Tax Credits

The following are some of my favorites, and can be used as templates for other communities to create similar incentives…

Rainwater-Harvesting Rebate in Tucson, Arizona

Rainwater-harvesting rebate can reimburse you up to $2,000 for water-harvesting earthworks or rain gardens (passive strategies), gutters, cisterns or tanks (active rainwater-harvesting systems), and even consulting and design.
You need to take a free greywater-harvesting class to get the rebate, which I think is great, since the class teaches you best practices enabling you to design and implement a better system, and/or enables you identify and hire competent, knowledgeable contractors to do the work for you.

Greywater-Harvesting Rebate in Tucson, Arizona

Greywater-harvesting rebate can reimburse you up to $1,000 for a greywater-harvesting system installation.
You need to take a free greywater-harvesting class to get the rebate, which I think is great, since the class teaches you best practices enabling you to design and implement a better system, and/or enables you identify and hire competent, knowledgeable contractors to do the work for you.


Water-harvesting and related financial incentives/programs are listed alphabetically by country, then state, then city. Note that this is an incomplete list; there are far more programs than those listed. This is simply meant to give you an idea of what is out there to inspire your community to at least do likewise, and hopefully even better.


Gold Coast, Australia
Mandated rainwater tank installation on new home and business construction
In the Pimpama Coomera Master Plan area of the Gold Coast all homes and businesses connected to the Class A+ recycled-water system (those approved for development after 29 August 2005) require a 3,000-liter (800-gallon) rainwater tank plumbed to their cold-water washing machine and outdoor faucets.


The rain-tax is collected based on the amount of impervious surface cover on a property that generates runoff directed to the local storm sewer.

The reason for the rain-tax? Construction of storm sewers and other utilities is financed with tax dollars. So, the more rainwater that is caught and kept as a resource where it falls, the less runoff there is to convey. Less runoff allows smaller storm sewers, which, in turn, saves construction and maintenance costs. Thus, people can qualify for rain-tax reductions or exemptions by reducing or eliminating the footprint of their on-site impervious pavement by reducing impervious pavement coverage, replacing impervious pavement with porous pavement, and/or installing green roofs (turning impervious roofs into porous, prairie-like surfaces).


Greenways Grants
The Conservation Fund, in partnership with Eastman Kodak and the National Geographic Society, provides small grants to stimulate the planning and design of greenways in communities across the United States. Grants may be used for activities such as mapping, ecological assessments, surveying, conferences, design activities, developing brochures and interpretive displays, public opinion surveys, hiring consultants, incorporating land trusts, building foot bridges, planning bike paths, passive water harvesting, or other creative projects. Applications may be submitted from March 31 through June 30 of each calendar year. Note: Pending the outcome of Eastman Kodak’s business reorganization process, the Kodak American Greenways Program is currently suspended. No date has been set for its resumption.

U.S. Green Building Council’s LEED standards
LEED stands for Leadership in Energy and Environmental Design. Buildings that meet these standards cost far less to maintain than conventional buildings, and they have higher market value. So progressive governments and builders are requiring that their buildings be built for LEED certification. For example, the City of Austin, Texas, requires all new facilities to be built to LEED Silver criteria or better. Water-harvesting systems count towards LEED certification.

Living Building Challenge
The Living Building Challenge goes much futher than LEED in terms of sustainable design and performance.

Federal Government Grants
The City of Portland, Oregon has used grants from this website to host a stormwater conference, create a sustainable stormwater street, and other stormwater related grants.

U.S. Department of Agriculture’s Forest Stewardship Incentive Program
Matches your expenses for erosion control, water-harvesting earthworks, and revegetation projects on private land of 1,000 acres or less (some exceptions for parcels up to 5,000 acres) up to $10,000 per landowner per fiscal year.

Natural Conservation Resource Departments
They provide free resources to help assess and improve your site’s watershed and wildlife habitat.

U.S. Fish & Wildlife Service Partners for Fish and Wildlife Program
This is a voluntary partnership program that provides technical and financial assistance to non-Federal landowners to improve fish and wildlife habitats for Federal trust species (e.g., threatened, endangered, and candidate species, migratory birds, and other declining species). Water-harvesting earthworks can qualify.

Environmental Protection Agency (EPA) 319 Grant Program
Clean Water Act Section 319(h) funds are provided to designated state and tribal agencies to implement approved nonpoint source-management programs. In accordance with guidance issued by EPA under Clean Water Act Section 319, Section 319(h) funding decisions are made by the states. States submit their proposed funding plans to EPA, and, if consistent with grant eligibility requirements and procedures, EPA then awards the funds requested by the states. Water-harvesting, erosion-control earthworks can qualify.

State-level funding

Land and water agencies
Provide a number of grants for such things as urban and community forestry projects—plant within water-harvesting and erosion-control earthworks

State Fish & Game or Federal Fish & Wildlife Services
Provide grants for wildlife habitat creation (supported by water harvesting strategies). Grants provide for work on private land and public land such as school grounds.

State Departments of Water Resources or Water Protection
Provide grants for watershed improvement and education. Can fund the creation of demonstration sites, workshops, and presentations.

County- and city-level funding

Inquire at local city-council or county-supervisor offices for local grants.


Greywater-Harvesting & Rainwater-Harvesting Tax Credits in Arizona (no longer an active program)
Effective January 1, 2007, Arizona taxpayers who install a “water conservation system” (defined as a system to harvest residential greywater and/or rainwater) in their residence may take a one-time tax credit of 25% of the cost of the system (up to a maximum of $1,000). Builders are eligible for an income tax credit of up to $200 per residence unit constructed with a water conservation system installed.

Note that a misinterpretation of the tax credit used to give the credit only for greywater systems, but now that Technical Correction (HB 2103) was passed and becomes law effective September 26, 2008, the tax credit will also apply to rainwater-harvesting systems. Once it takes effect, it will be retroactive to January 1, 2007. So, anyone who has purchased water harvesting systems from January 1, 2007 onward can apply for the AZ tax credits until the annual amount allotted to the credit has been filled.

There is $250,000 per year allocated for these tax credits.

Arizona State Land Department, Forestry Division, Urban & Community Forestry Program’s Community Challenge Grant Program
Can be used to fund the planting of trees in water harvesting earthworks, along with cistern-building and greywater-harvesting workshops.

Pima County, Arizona

PRO Neighborhoods (no longer an active program)
A grants and technical assistance program for local communities based in Pima County, Arizona offering small grants ranging from $500 to $5,000 to groups working together to mobilize and build upon existing talents and resources within the community.


City of Tucson Up to $2,000 rebate for passive (water-harvesting earthworks or rain gardens) and/or active (gutters and cistern/tank) rainwater-harvesting systems.

City of Tucson
Greywater irrigation rebate of up to $1000

Green Stormwater Infrastructure (GSI) Mini Grant Program

New Mexico

Santa Fe County

Mandated rainwater-tank and water-harvesting-earthwork installation on new residential and commercial construction
Residences with 2,500 square feet or less of heated area must utilize rain barrels, cisterns, or other catchment basins. Residences 2,500 square feet or more of heated area must install an active rainwater catchment system comprised of cisterns. All commercial development is required to collect all roof drainage into cisterns to be reused for landscape irrigation. Harvesting Ordinance.pdf


Portland, Oregon

Clean River Rewards: Contain the Rain
Clean River Rewards is the Portland stormwater utility’s discount program. With Clean River Rewards, Portland ratepayers can save money and work for clean rivers and healthy watersheds at the same time.
If you manage stormwater on your property, you can receive up to a 100% discount on your on-site stormwater management charges because your actions help protect rivers, streams and groundwater from the damaging effect of stormwater runoff.

Downspout Disconnect Program

This program disconnects household roof-gutter downspouts from the combined sewer/stormwater system, then redirects the roof runoff to irrigate the landscape with the rainwater. The work is done for free by the City, or you can get a $53 reimbursement if you do it yourself. More than 42,000 homeowners have participated, removing over 942 million gallons of roof water per year from the combined sewer/stormwater system.


State of Texas
State sales and property tax exemption for all water-harvesting and greywater systems in Texas
See page 53 of the following document online:

Austin, Texas
Rain barrel and cistern subsidies and rebates
The City of Austin Water Conservation Program distributes over 250 rain barrels per month to homeowners at a subsidized cost, and provides rebates for the installation of approved cistern systems. Commercial/industrial properties can receive rebates up to $40,000 for the installation of rainwater harvesting and greywater systems. New commercial facilities must install a separate irrigation meter costing between $5,000 and $25,000 unless they can provide 100% of all outdoor water needs from alternate water sources such as rain, greywater, and air conditioning condensate. See pages 54 – 55 of the following document online:


The following links lead to Seattle projects such as Seattle Green Factor and low-impact development.


City/public rain-garden/curb-cut installation cost-share program in public rights-of-way (terraces)
Madison City Engineering is currently offering rain gardens in public right-of-way (ROW) terraces in conjunction with street reconstructions and resurfacing projects. Streets need to have ROW terraces that meet the following criteria to be considered eligible:

  1. Terraces must be at least 10 feet wide;
  2. There must be at least 15 feet in length available for a rain garden;
  3. Trees must be at least 10 feet from the edge of a rain garden;
  4. Terraces cannot be too steep (in any direction);
  5. There cannot be issues with high groundwater;


Grassroots Grants: An Activist’s Guide to Grantseeking by Andy Robinson, Jossey-Bass, 2004.

Grassroots Grants: An Activist’s Guide to Proposal Writing by Andy Robinson, Chardon Press, 1996.

Do you have an addition to this list? Let me know.

Active SystemsGreywater HarvestingNeighborhood Food ForestryPassive SystemsRainwater HarvestingStormwater & Street Runoff Harvesting