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As water scarcity and quality challenges mount globally, the water tech sector is experiencing a surge of innovation, investment, and collaboration from both public and private stakeholders. As part of ClimateHaven’s deep dive into water tech innovation, we are exploring various solution areas and their adoption by different user groups, from utilities and heavy industry to agriculture and real estate. In this blog piece, we focus specifically on hard tech – ground-breaking solutions rooted in advanced engineering, materials science, chemistry, and biology, typically involving physical systems or hardware designed to solve our toughest challenges.
In its 2025 State of the Water Industry Report, the American Water Works Association cites financing for capital improvements as the top challenge this year, with only 41% of utilities reporting being able to cover costs through rates and fees. With limited latitude to continue relying on rate increases, utilities need innovative, cost-effective technologies to continue operating effectively and mitigate increasing strain on their systems. And across both utility and heavy industry, the need for better climate resiliency planning, water reuse, energy efficiency, resource recovery, digitization, and adapting to water workforce shortages requires accelerated investment and adoption of innovative solutions. On the hard tech front, a few of the areas we see as particularly promising include water quality testing & monitoring, advanced filtration, wastewater treatment, and decentralized systems.
Water quality testing and monitoring form the backbone of modern water management. Utilities and municipalities are under increasing regulatory pressure to ensure safe drinking water and meet new standards for contaminants like PFAS. And industrial players — from food processors to power plants — rely on real-time monitoring to avoid costly shutdowns, regulatory fines, and reputational risks. The latest advances in water quality testing devices enable instant results for rapid decision-making and efficient use of resources (e.g., more costly lab testing / certification). These tools empower utilities to act proactively, industries to maintain compliance, and property managers to safeguard their assets.
Advanced filtration technologies are crucial for removing “forever chemicals” (PFAS), microplastics, and other emerging contaminants. Utilities and water-intensive industries are deploying high-pressure membranes, nanofiltration, and more recently, electrochemical processes – among other solutions, new and old, to meet stricter discharge requirements and incentives for water reuse. Last September, The Orange County Water District (OCWD) and East Orange County Water District (EOCWD) cut the ribbon on a new PFAS treatment plant using ion exchange technologies to treat groundwater, making an important, long-term commitment to mitigate decades of water supply contamination – in their words, “we didn’t create the PFAS issue, but we are committed to solving it.” PFAS destruction and other novel water purification technologies form part of a broader technology stack that – with continued investment – will enable utilities to continue delivering safe, clean water to their communities. And for industry leaders (e.g., big tech, manufacturing, pharma, food & consumables, etc.), innovative advanced filtration mechanisms allow them to meet both quality and sustainability goals, especially as water costs continue to increase.
Wastewater is no longer just a disposal problem — it is increasingly becoming a core resource. Utilities and industries are ramping up investments in advanced treatment methods to recover water, nutrients, and even valuable byproducts like lithium or phosphorus from wastewater. Just a few miles away from the White House, DC Water’s advanced wastewater treatment plant treats nearly 400 million gallons of sewage each day, from more than two million consumers. They work closely with neighboring state agencies and strategic partners to recycle biosolids from this wastewater, keeping nitrogen and phosphorous out of local waterways and supporting local farmers by lowering their fertilizer costs.
Across the U.S., both utilities and industry leaders are deploying solutions like advanced oxidation, membrane bioreactors, and resource recovery systems to facilitate greater reuse and revalorization of by-products. Energy producers (e.g., oil and gas) and other heavy industries are increasingly investing in wastewater treatment to enable water reuse for cooling, boiler systems, and ideally even higher purity use cases like cleaning or production. These technologies are particularly transformative for agriculture – which accounts for 70% of global water use (40% in the U.S.) – in reducing freshwater consumption for irrigation. And some startups (like Phoenix Tailings) are working on processing mining tailings to recover valuable metals (e.g., copper, gold, lithium, REEs) from waste streams previously considered uneconomic. As global geopolitical tensions and supply chain challenges continue to mount, revalorizing waste to recover new inputs for domestic manufacturing is starting to make more and more sense.
Decentralized water systems — like modular water treatment units, rainwater harvesting, atmospheric water generation, and off-grid desalination — add resilience and flexibility to users at the edge of traditional networks. These include plug-and-play solutions for buildings, farms, and remote communities; solar-powered and energy-efficient designs for off-grid applications; and consumer-friendly systems for home water reuse and purification. Decentralized systems fundamentally democratize access to clean water and enable real estate developers and consumers to reduce reliance on existing infrastructure and lower their environmental footprint. In San Francisco, Fifteen Fifty, a 40-story luxury residential high-rise building, implemented the city’s first approved and operational onsite greywater reuse system, using Epic Cleantec’s OneWater technology that captures and treats greywater from showers and laundry for non-potable uses (e.g., flushing, irrigation). And in India, the iconic Taj Mahal Palace Hotel in Mumbai partnered with Indra Water to install modular, plug-and-play wastewater treatment units that utilize ionic reactions to remove pollutants on-site. Decentralized systems solve real, increasingly painful challenges around cost, compliance, and space, while offering flexibility unmatched by traditional solutions.
The water tech landscape is rapidly evolving, driven by regulatory shifts, climate pressures, and rapid advances in technology. Utilities, heavy industry, agriculture, and retail consumers are key stakeholders in this ecosystem — and all stand to benefit from water tech innovation. Despite historical challenges in financing hard tech, new systems and solutions are fundamentally transforming how we operate – and the ROI is becoming increasingly evident.
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As a ClimateHaven MBA Fellow, Ioana Solomon led the development of the Water Tech Landscape Report while completing her MBA at Yale School of Management, where she graduated in May 2025. She served as co-president of the Private Equity & Venture Capital Club and is passionate about climate investing, innovation, and impact-driven finance, drawing on her background in institutional wealth management at Morgan Stanley.
Max Storto is the Director of Innovation Strategy and Venture Capital at Xylem. Also a Yale School of the Management (MBA) and Yale School of the Environment (MEM) graduate, Max brings a wealth of experience in socially responsible investing, shareowner engagement, research, communications and public relations, institutional sustainability policy and programs, interviewing, and working with community development organizations.
