Is Atmospheric Water Generation an Economically Viable Solution?

The increasing pressure on freshwater resources motivates the need for exploring new water harvesting methods, critical for global sustainable development. Atmospheric water generator (AWG), or air to water, is a potential under-explored component of the water solutions portfolio. This paper offers the first bottom-up model of AWG in the environmental economics and policy literature to assess the economic potential and riskiness of a representative AWG system. The model is used to estimate the performance of a typical AWG machine in ten locations with heterogeneous climate and economic conditions. Using a 4-year time series, estimates of the value at risk for water production are provided as well. Assuming a perfect substitution between AWG machines and bottled water, the financial performance of the AWG machines demonstrates an attractive substitute product in the majority of locations. However, the results also indicate that the current state of AWG does not provide economically viable alternatives for potable tap water or nondrinking water sources. This paper provides a quantitative foundation to evaluate the AWG technology as a business practice. Our work can inform water supply debates in both developed and developing countries.