Lowaters Nursery in Southampton has won in the UK Water Efficiency Awards farming and horticulture section for its rainwater-harvesting system.
The nursery installed the system in 2010 and has gone from using 17,000cu m of water to almost nothing, delivering savings of £20,000 each year. The system includes a seven-million-litre reservoir, rainwater capture and a clean water storage and pumping system.
The awards are organised by the Environment Agency and Waterwise to recognise organisations taking steps to cut water consumption.
Lowaters nursery director Charles Carr said: "We are very proud. Since we put in the system we have used no mains water other than for drinking. Even the toilets flush on reservoir water."
He added: "It's a great environmental project and it's economic. There is a three-to-four-year payback. It was a big investment but it pays for itself fairly quickly. Also, our mains water was poor quality and with the reservoir we get a better quality of water for growing plants."
Environment Agency area environment manager Simon Moody said: "The achievements at Lowaters Nursery are to be celebrated - especially considering we started the year in drought across many parts of the South East."
He added: "This is a shining example of a business taking the initiative to save money while ensuring that precious water resources are protected - an active demonstration that sustainability and profitability need not be mutually exclusive."
The runner-up in the farming and horticulture category was East Malling Research and South East Water for research into reducing water and fertiliser use for field-grown strawberries.