Non-revenue water is water put into a supply system that earns no money for the utility, through leaks, theft, meter errors or unbilled use.
Non-revenue water (NRW) is the difference between the volume a utility puts into its network and the volume it bills to customers. It is a main measure of how well a water utility is run. The International Water Association (IWA) water balance splits NRW into three parts. Unbilled authorised consumption is water used legally but not billed, such as for firefighting, mains flushing and some public taps. Apparent losses, also called commercial losses, are water that reaches a user but is not paid for, from theft, illegal connections, meter under-registration and data handling errors. Real losses, also called physical losses, are water that leaks from mains, service pipes and overflowing tanks before it reaches a customer. A worked example: a utility supplies 50,000 m³/day and bills 34,000 m³/day. NRW is 50,000 - 34,000 = 16,000 m³/day, which is 16,000 / 50,000 × 100 = 32%. If unbilled authorised use is 1,000 m³/day and apparent losses are estimated at 4,000 m³/day, real losses are 16,000 - 1,000 - 4,000 = 11,000 m³/day. NRW as a percentage is easy to explain but can mislead, because it moves with consumption: the same leakage looks smaller where people use more water. For real losses, the IWA recommends measures such as litres per connection per day, and the Infrastructure Leakage Index (ILI), which is current annual real losses divided by unavoidable annual real losses worked out from mains length, number of connections and pressure. An ILI near 1 means leakage is close to the lowest level that is technically reachable. Real losses are cut by pressure management, active leak detection, fast and good repairs, and pipe renewal. Apparent losses are cut by meter replacement, cleaner billing data and action on illegal connections. A water balance rests on estimates, so accurate meters at the inflow points matter a great deal.