Report Explores Co-Funding Water Management through “Stacked Incentives”

June 8, 2021, Oakland, California – Today the Pacific Institute released a report to help water managers scale “stacked incentives” for water customer incentive programs. The report defines “stacked incentives” as customer incentive programs, including rebates and discounts, technical assistance, and/or education programs, that are co-funded by two or more separate entities to motivate voluntary action on public or private property. The report finds that in the water sector, developing stacked incentive program can increase  funding, foster better engagement with customers, and achieve multiple benefits for the community and environment.  

Much of the American West is currently in drought, and the Colorado River Basin is experiencing one of its driest years on record, with levels at Lake Powell, the second-largest reservoir in the U.S., at its lowest level since its inception in 1963. At the same time, water quality and flooding continue to wreack havoc on communities and ecosystems throughout the U.S. Amid increasing pressure on limited water supplies, and other climate-related challenges, people are looking for new ways to better manage water.  

 Water utility customer incentive programs are a powerful way to motivate customer action and foster engagement. These incentive programs can take many forms, from rebates for high-efficiency fixtures and appliances to technical assistance for installing cisterns and rain gardens. In addition to providing water-related benefits, many of these programs generate additional co-benefits, including reductions in energy use for heating or treating water and wastewater, increased carbon sequestration in landscapes, and enhancements to local biodiversity. 

Stacked incentives can help water managers to: 

  • Increase funding for program delivery and scaling; 
  • Improve economies of scale for program customer service and logistics; 
  • Reduce customer frustration over dispersed and time-intensive incentive processes; 
  • Increase financial assistance for low-income customers; and  
  • Improve visibility of programs through combined marketing and outreach efforts. 

“Stacked incentives provide water utilities with a unique opportunity to increase funding for customer incentive programs through collaborative partnerships,” says report co-author Sarah Diringer. “With increased funding and collaboration, water utilities can increase access to incentives for low-income households, and so much more.” 

In this report, the authors define stacked incentives, highlight successful examples throughout the United States, and identify best practices for water utilities and other organizations to collaborate on these programs. The authors find that while there are challenges to implementing stacked incentive programs, the benefits greatly outweigh the costs for both the water utilities and customers. 

Read the report here


Founded in 1987, the Pacific Institute is a global water think tank that combines science-based thought leadership with active outreach to influence local, national, and international efforts in developing sustainable water policies. Our mission is to create and advance solutions to the world’s most pressing water challenges. From working with Fortune 500 companies to disenfranchised communities, we lead local, national, and international efforts in developing sustainable water policies and delivering meaningful results.