<b>Problem statement:</b> The urban water supply systems in Australian large cities, which generally depend on large surface water reservoirs, are highly stressed due to rapid urban growth and severe drought conditions during the current decade. To ensure the long term sustainability of urban water supply, various alternative water sources including rainwater tanks, grey water, wastewater and desalination plants are being examined in Australia. In the previous research, it has been shown that rainwater tank of appropriate size, installed in detached small dwellings, can meet a significant proportion of household water demand, but there has been limited study on water savings and financial viability of Rain Water Harvesting System (RWHS) for multistorey residential buildings. This study examines the sustainability of RWHS in multistorey residential buildings in Sydney under different scenarios such as varying roof area, number of floors in the building, water price and interest rate to identify favorable condition where RWHS proves to be sustainable. <b>Approach:</b> A hypothetical multistorey building was considered and various scenarios in relation to site area and floor arrangement were established. A water balance model was developed to calculate water savings for various scenarios. Finally, life cycle costing was undertaken to identify most sustainable RWHS scenario for the hypothetical multistorey building. <b>Results:</b> It was found that a higher roof area is more favorable in terms of water savings and financial benefits. Capital and maintenance costs account for the majority of the expenditure of a RWHS. Plumbing cost forms the largest single component of the capital cost. It is shown that lower interest and increased water price regimes enhance the financial viability of RWHS. <b>Conclusion:</b> It was found that it is possible to achieve pay back for a RWHS under some favorable scenarios and conditions thus making the RWHS for multistorey buildings in Sydney sustainable
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