Monday, April 16, 2007. 7:07am (AEST)

A new study commissioned by three environment groups has found that rainwater tanks are a more cost effective alternative to other water saving measures.

The study conducted by economists, Marsden Jacob Associates, found that rainwater tanks are more than five times as energy efficient as a desalination plant per kilolitre of water produced.

It also revealed that if governments rolled them out to 5 per cent of households in Sydney and south-east Queensland, big water projects like dams could be delayed for up to a decade.

The independent report commissioned by three environment groups found tanks are more cost effective and energy efficient than a desalination plant or a dam.

Nearly 40 per cent of Adelaide households have installed them, but only 5 per cent of households in Perth, Melbourne and Sydney have them.

Professor Ian Lowe from the Australian Conservation Foundation (ACF) says governments should seriously consider rainwater tanks as an alternative source of water.

"There's a very big saving in putting in rainwater tanks instead of infrastructure," he said.

"Just to give a classic example - for what the Queensland Government is proposing to spend on Traveston dam you could give every house in south-east Queensland a rainwater tank and have money left over.

"We should be developing innovative financial solutions to ensure the take up rainwater tanks".

Ms Noble says the findings provide a clear message to state governments.

"If we install rainwater tanks to 5 per cent of households what we are doing is creating a virtual dam from the rooftops across our suburbs and we need to invest in that in the same way as we invest in infrastructure," she said.

Currently 17 per cent of Australian households have installed them.