You want more water security than a direct connection to the source can provide.
The yield of the source cannot directly provide for peak demand.
The yield of the source is less than that required for firefighting.
The source is less secure than water stored in a tank (e.g., if the source requires pumping water, while water stored in a tank doesn’t).
The pipeline distance to the source is so far that it is more economical to use a smaller size pipe and a tank, than a pipe large enough to carry the peak flow all the way from the source to the users.
The biggest variable by far is how much water security you’re aiming for. In general, the more storage you have, the better your water security. Without storage, the security—the percentage of time you’ve got water—is equal to the security of the source. The more storage you’ve got, the longer an interruption to the source supply you can cover with stored water.
Is it possible to have too much storage? Yes. Too much storage can lead to freezing or water age problems. More likely, it simply constitutes a waste of the Earth’s valuable resources. Because of the high up-front cost of storage, it is rare to see anyone except the super-wealthy install too much storage volume.
Sizing a Tank For Demand Peaks which Exceed Flow
Although water needs are usually expressed as a value-per-person for a 24-hour day, in actuality just about all of this water will be used during a period of 10 to 12 hours. Over half of the entire day’s water use may happen between dinner time and bedtime, or in the morning, depending on the culture. Water provided by the source during low-demand periods (e.g., overnight) can be stored for use during high-demand periods.
Sizing a Tank When You Have Limited Water Supply with Scheduled Use
This approach is the inverse of the approach above. It may be appropriate if the water supply is limited and there are known lengths of time without water use. Instead of sizing the tank to cover use, you size the tank to cover production of the source during the longest time without water use. If you store all the water that is produced during the longest time without usage, you’ll have maximized your limited supply.
Sizing a Tank to Cover Use During Interruptions in Supply
Most systems have at least a day’s worth of storage to cover supply interruptions due to servicing, a fault within the system, or a disaster such as an earthquake or power outage. To size your tank for supply interruption, consider what is likely to jeopardize your supply and for how long.
Sizing a Tank When Production Is Intermittent
If your water production is intermittent (for instance, from harvesting rainwater), your tank should cover the maximum cumulative deficit between production and consumption.
Sizing a Tank for Firefighting
If your system is part of a project that requires permits, there are likely specific legal requirements for the system’s firefighting capabilities which you will have to research and fulfill. These probably include much more storage, bigger pipes and higher pressure than you could otherwise imagine.
Size and Structural Integrity
As tanks get bigger, the structural engineering issues get much bigger. Tanks of a thousand gallons are no great challenge. A 10,000 gal (40 m3) tank requires serious consideration of the loads that will be operating on it. Any tank over 30,000 gal (110 m3) should be professionally engineered.