Melbourne households face some of the highest water prices in Australia, and they have been rising steadily. Rainwater tanks are one way to reduce mains water consumption, but the case for them depends on how you use them and what you connect them to.
Here is a realistic assessment.
What a Rainwater Tank Can Supply
The value of a tank depends entirely on what it is connected to. A tank sitting in the garden filling up watering cans saves relatively little compared to mains water costs. A tank plumbed into toilets and laundry, which together account for around 35 to 40 percent of household water use, delivers meaningful savings year-round.
Common end uses for tank water:
- Garden irrigation and outdoor washing
- Toilet flushing (requires plumbing connection)
- Laundry cold water connection (requires plumbing connection)
Hot water system top-up (requires additional treatment in most cases)
Drinking water from a rainwater tank is possible but requires a first-flush diverter, appropriate filtration and regular maintenance of both the tank and the catchment surface.
Melbourne Rainfall and Tank Sizing
Melbourne averages around 650mm of rainfall per year, though distribution is uneven. Winter months tend to be wetter; January and February are typically the driest. A tank that runs dry in summer but overflows in winter is not being used efficiently.
As a rough guide
A 2,000 to 5,000 litre tank suits outdoor use and occasional toilet connection
A 5,000 to 10,000 litre tank is more appropriate for households wanting to reduce mains water use across toilets and laundry
Above 10,000 litres is worth considering for larger properties or households with high outdoor water use
These are starting points. The right size depends on your roof catchment area, household size, and intended end use.
Melbourne Water Rebates
South East Water, Yarra Valley Water and Melbourne Water have historically offered rebates for rainwater tank installation when the tank is plumbed to toilets or laundry. Rebate availability and amounts change, so check directly with your retailer water company before purchasing.
As at early 2025, rebates of several hundred dollars have been available for eligible installations. This can meaningfully reduce the payback period.
Cost and Payback
Supply and installation of a tank varies significantly depending on tank size, material (poly vs steel), location on the block, and how much plumbing is required to connect it. Simple above-ground installations with an outdoor tap connection are at the lower end of the cost scale. In-ground tanks or systems requiring extensive internal plumbing are more involved.
Get itemised quotes that separate the tank, installation, and any plumbing work so you can compare properly.
Payback periods on a connected system, where the tank is replacing mains water for toilet flushing and laundry, are typically in the range of several years for a mid-sized tank. This shortens as water prices rise.
Is It Worth It?
Yes, if the tank is properly sized, installed by a licensed plumber, and connected to toilets and laundry rather than just outdoor use. The water savings from a connected system are meaningful. The environmental case is also straightforward: less demand on the mains system during dry periods.
No, if you are expecting the tank to pay for itself quickly from garden watering alone. The maths do not work well at that level of use.
