Greg Cameron says he can save Australian households thousands of dollars and provide water security by installing a $4000 rainwater collection system.

Only about 20 per cent of Australian households rely on rainwater for their needs, leaving 4 million homes ready to be connected.

Mr Cameron said this equates to a potential $16 billion market.

The entrepreneur already has sales, manufacturing and finance agreements in place but says the plan is too financially risky to roll out while political parties could not rule out imposing new charges on rainwater collection.

Water use is governed at a state level. The Water Resources Act stipulates that the ACT government had the right to use and control all water ''of the territory''.

All three major political parties told the Sunday Canberra Times that they believed the definition included rainwater, but said they had no current plans to introduce charges on rainwater collection and use.

But Mr Cameron said such a move would be akin to nationalising rain.

''Every person in Australia has the right to use rain,'' Mr Cameron said.

''I can't get this business plan up as government could turn around and tax it out of business.

''It is a cynical deterrent to private water supply competing with government-owned water supply.''

Despite the risk, University of Adelaide water law expert Paul Leadbeter said that governments were unlikely to impose charges on household rainwater tanks.

Mr Leadbeter said that legally, a home owner had a right to collect and use rainwater from their roof, and administering and policing such a charge would be a massive undertaking.

''There appears to be an increasing legislation that means governments could in theory control what you do with the rainwater you capture,'' Mr Leadbeter said. ''But I'm not aware of anywhere in Australia where people have been told they can't use the rainwater collected on their property.

''It comes down to, what right do governments have to charge for something that falls from the sky?''