Water has always shaped the future of Texas. It influences where communities can grow, how businesses operate, what redevelopment is possible, and whether local economies can remain resilient during drought, rising infrastructure costs, or increasing demand.

A new report from the Pacific Institute, Untapped Potential: An Assessment of Municipal and Industrial Water Efficiency Potential in the United States, makes a compelling case for one of the most practical water strategies available today: treating water efficiency as a source of water by reducing demand before investing in additional supply.

The report finds that existing technologies and practices could reduce municipal and industrial water use in the United States by 25% to 60%, saving an estimated 14.0 to 34.1 million acre-feet of water per year. Even basic upgrades that meet current standards and eliminate waste could cut U.S. municipal and industrial water use by about one-quarter.

Texas property owners can start by looking for water-saving upgrades in the buildings they already own. TX-PACE can help finance eligible improvements, from low-flow fixtures to water reuse systems.

Water Efficiency Is Infrastructure

Water conversations often focus on supply: new reservoirs, pipelines, treatment capacity, groundwater availability, or long-range planning. Those conversations are necessary. The Pacific Institute’s report reinforces an equally important point: water efficiency is also infrastructure.

Every gallon saved through better fixtures, improved controls, leak reduction, efficient irrigation, reuse systems, or smarter building operations reduces pressure on the larger water system. In many cases, these improvements can be implemented faster and at lower cost than developing new supply.

The issue is especially important in Texas, where population growth, periodic drought, and economic development continue to place pressure on water resources. Water conservation is a statewide concern, not a challenge facing only one community. The Texas Commission on Environmental Quality's November 6, 2026 report identifies public water systems across multiple Texas counties that have reported restrictions on water use. Although restrictions and supply conditions change over time, these reports underscore the value of investments that reduce demand and strengthen long-term water resilience.

Local governments are working to attract investment while also protecting long-term quality of life. Communities do not have to choose between growth and conservation. With the right tools, they can support both.

TX-PACE offers one way to support private investment in water conservation and building improvements.

How TX-PACE Helps Finance Water Conservation

Texas Property Assessed Clean Energy, or TX-PACE, provides eligible property owners with access to long-term private financing for qualified improvements that enhance water conservation, energy efficiency, resiliency, and property performance. TX-PACE funds improvements to qualifying private properties, rather than improvements to government-owned property. Financing is repaid over time through a voluntary property assessment, and qualifying projects must meet applicable savings-to-investment requirements.

In practical terms, TX-PACE addresses a persistent barrier to implementing eligible water-efficiency improvements: their upfront cost.

TX-PACE-eligible water improvements can include water management systems, controls, irrigation equipment, rainwater collection systems, wastewater recovery, reuse systems, toilets, faucets, greywater systems, plumbing upgrades, water heating systems, or other permanent improvements that reduce water or energy consumption.

The breadth of eligible improvements matters because water efficiency rarely depends on one standalone upgrade. Often, it is part of a larger scope that may include HVAC, lighting, building envelope, water heating, plumbing, or controls. TX-PACE can help finance a coordinated package of qualifying improvements rather than relying on piecemeal upgrades.

A Texas Example: Crazy Water Hotel

The opportunity is not theoretical. TX-PACE projects across Texas are already demonstrating how private investment can modernize buildings, reduce resource use, and support local economic development.

The historic Crazy Water Hotel in Mineral Wells used TX-PACE financing for a renovation that included low-flow fixtures, HVAC replacement, building envelope sealing, LED lighting, appliances, and elevator replacement.

The combination of improvements reflects why water efficiency belongs in the broader infrastructure conversation. For a historic private property, modernization is not just about lowering utility bills. It is about preserving a community asset, supporting reinvestment, improving building performance, and making redevelopment more financially feasible.

For many Texas communities, investments in qualified water-saving improvements can support stronger redevelopment projects.

From Potential to Projects

The Pacific Institute titled its report Untapped Potential for a reason. The technologies and strategies needed to reduce water waste already exist. The challenge is implementation.

Financing is where potential becomes action.

For Texas property owners and developers, the opportunity is clear: use proven water-efficiency strategies to reduce demand, lower operating costs, support redevelopment, and strengthen project performance. TX-PACE can help move eligible improvements from concept to construction.

Local governments have a different, equally important role. By adopting or promoting TX-PACE programs, city and county leaders can help make private-sector investment available for eligible projects in their communities. TX-PACE can complement existing economic development tools without creating a new taxpayer-funded incentive or competing for limited public funds.

The cheapest water supply is the water we do not waste. The next step is making sure the eligible projects that save it can get financed.

Suggested Next Steps

Property owners and developers: Check whether your project may be eligible for TX-PACE financing and explore how water conservation, energy efficiency, or resiliency improvements could fit into your capital plan.

Local governments and economic development professionals: Learn how adopting or promoting TX-PACE can help your community support private investment in water conservation, building modernization, and economic development.

Lenders and capital providers: Review TPA’s lender resources to better understand how TX-PACE can complement senior lending, support borrower cash flow, and help finance eligible private property improvements.

Service providers: Connect with TPA resources and training opportunities to learn how to identify, scope, and support successful TX-PACE projects for eligible property owners.

References

Pacific Institute. Untapped Potential: An Assessment of Municipal and Industrial Water Efficiency Potential in the United States. October 2025.

Texas Commission on Environmental Quality. List of Texas Public Water Systems Limiting Water Use to Avoid Shortages. Report verified November 6, 2026.