Thanks to a decades-long investment in thought leadership and millions spent in marketing, solar power has created a level of awareness about rebates for “sustainable” home improvements. Now that society wrapped our heads around that, stormwater, the unruly little brother of solar, has told consumers to “hold my beer” while they do one better.
Enter: stormwater retention credits.
These innovative financial incentives are a little unconventional, but understanding how they work could make a serious impact on the bottom line of your next project.
What are Stormwater Retention Credits (SRCs)?
SRC programs are kinda like extra credit that you can get on a class assignment. The difference is that once you’ve earned that extra credit, you can sell the excess points off to another student who needs those points to pass.
So, how does that work with stormwater and why is this “a thing”?
The Non-Glamorous Truth About How Stormwater is Handled (the sewers)
There’s a reason that urban areas are called “concrete jungles.” That’s because over time our landscapes have been slowly converted into hardscapes. Unfortunately, unlike the jungle floor, water is not soaked back into the soil because concrete is pretty much an impermeable solid.
That means that water falling onto impervious surfaces (think roads, roofs, sidewalks, etc.) sits on top of the surface until it can flow somewhere else. In many cases, the resulting runoff flows into a sewer or “gray infrastructure” if it is not mitigated through some form of “green” infrastructure.
Combined Sewer Systems
Depending on the age and size of the system, as well as the kind of system (combined versus separate pipes), stormwater infrastructure can be easily overwhelmed during large rain events and that leads to surface flooding. To avoid excess water from running into high traffic areas, they redirect excess water runoff. This outflow is normally funneled towards local streams, lakes, and rivers.
Ideally, the water is treated before it ever reaches its destination. However, this is rarely the case. For people who live in many urban areas, it has become almost commonplace for a boil water advisory to take effect after every major rainstorm and now you know why.
Simply put, to ensure local water quality and to make sure the polluted water doesn’t infiltrate the water supply, stormwater needs to be treated. This can happen either onsite by local green infrastructure (GI) or by municipal treatment facilities. Since the latter are unable to keep up with the pace of urbanization and climate change, they encourage or incentivize property owners to build GI on their sites.
This is the major driver of SRCs and a huge factor in the campaign to motivate private sector adoption of green infrastructure.
Urban Water Quality
When rain runs off impervious surfaces such as sidewalks, streets, and roofs, it collects a wide range of toxic pollutants, which are then dumped, usually untreated, into local waterways. Motivated by the obligation for municipalities to make cities more resilient, livable, and equitable, many cities are taking steps to reduce stormwater runoff through large-scale “green infrastructure” (GI) solutions.
Most cities’ GI plans include modifications to existing paved spaces on public properties and in the public right-of-way such as streets and sidewalks.
Unfortunately, the general municipal response still lags behind the effects of stormwater pollution, which is part of the reason that the EPA initiated the Clean Water Act.
The Clean Water Act (CWA) establishes the basic structure for regulating discharges of pollutants into the waters of the United States and regulating quality standards for surface waters.
In the context of urban stormwater, green infrastructure (GI), or stormwater management practices (SMPs), keep polluted stormwater on or near the site where the rain falls—and out of waterways—until it can be treated, evaporate back to the atmosphere, be used onsite, or filter into the ground to benefit vegetation and replenish groundwater supplies.
The Cost to Develop Land
The most common and straightforward way for cities to realize some of the GI (green infrastructure) potential of private land is by requiring on-site stormwater retention as a condition of a construction permit.
New developments above a certain size and large retrofit projects are required to treat a certain amount of stormwater on-site, to comply with water quality standards. Stormwater credit trading programs enable property owners who are subject to an on-site retention requirement to meet a portion of their requirements by purchasing SRCs. These stakeholders may purchase “credits” through a managed marketplace.
Why incentivize the private sector?
Private property is a substantial contributor to stormwater runoff. In fact, 80% of urban areas are privately owned. The private sector is integral to combatting stormwater flooding. Most land is held by private landowners and thus, the private sector contributes far more to stormwater issues like flooding, pollution, and property damage. So cities and municipalities are developing their own programs to engage private property in the fight against water pollution.
The City of Seattle’s program has helped to improve water quality in Lake Washington for example. Or in Washinton DC, RiverSmart programs are in place to help the Anacostia River.
Satisfying water quality requirements will often necessitate controlling pollution from public and private property. In addition, stormwater management opportunities can be less expensive on private land than on public land.
Who Sells SRCs?
Stormwater retention credits are created through projects that implement stormwater management practices to store, detain, or treat stormwater runoff. The property owner who has implemented GI on their site is the one who is allowed to sell the credits granted to them by the local municipal program.
In order to get credits, GI practices can include green infrastructures such as rain gardens, bioswales, and permeable pavement. The goal of the SRC program is to promote these types of practices in order to reduce stormwater runoff and improve water quality.
Getting Paid Using SRCs
For some projects, it may actually be feasible to be the creator of stormwater retention credits, and thus create a sustainable revenue stream for other developers. An SRC aggregator can fund a variety of projects by including these technologies in their construction plans by planting trees, rain gardens, vegetated swales, porous pavement, and green roofs. These projects help to improve water quality and reduce the amount of stormwater runoff entering our local watersheds.
How can land developers leverage SRCs?
What this means is that as a developer or property owner, it’s actually possible to play on either side of the SRC equation. Either you can leverage the SRC marketplace to purchase credits from others with GI and mitigate your stormwater obligations, or you can organize your next project with green infrastructure in mind to capitalize on the opportunity to sell stormwater retention credits or cover your government requirements.
How to start with SRCs
Whether you want to start selling credits because you have green infrastructure on your property, or if you are a larger commercial project looking to help offset regulation costs by buying credits, the best way to get started is to reach out to your local stormwater or groundwater program. Each city has different stipulations and compliance requirements for obtaining SRCs, and some urban areas-or most likely smaller cities or rural areas-might not even have a SRC program in place. Most SRC programs are created by larger cities near life-sustaining bodies of water.
If you are looking into finding out how these programs are created and why they exist we encourage you to dive in deeper with this SRC program guide.
At Rainplan we also utilize SRCs when helping private property owners develop a plan for how they can manage stormwater on their site. Our database includes SRC programs in our incentive matching process, so if your property qualifies for this program you will see it show up in your dashboard.
Haven’t created a Rainplan yet? Start here by searching your property address to see what incentives you qualify for.