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With three years of drought, having a green lawn can feel almost like a crime. Gov. Arnold Schwarzenegger has declared a water emergency, and thousands of farm workers are out of a job due to dried-out fields. Bright green grass doesn't evoke many envy-green neighbors nowadays.

Last summer, when my lawn was turning yellow, I decided to tear it out altogether. Unfortunately, I didn't realize until after-the-fact that the City of Palo Alto would pay me to do this.

The city offers $1.50 per square foot of lawn removal, up to $3,000. After the yard is given a make-over, rebates are given to cover the cost of labor, drought-resistant plants, efficient irrigation systems and much more.

An inspector must be called before the operation begins to verify an irrigated lawn. I missed this crucial step and missed out on the rebate. The city is strict about this requirement, and a total of only 90 rebates were given in 2008-09, according to Catherine Cox, Palo Alto Utilities account representative.

In place of a lawn, we planted trees and flowers, which still take water, of course. Yet we managed to grow some beautiful plants while reducing our water bill by more than half.

How, you ask? The answer is gray water -- water that is not fit for drinking, yet suitable for watering the garden. This includes water used for bathing, dishwashing and laundry, and is distinct from blackwater -- water that has come in contact with the toilet.

In a drought-parched state of more than 30 million thirsty citizens and millions of acres of farms, gray water can be an integral part of any water savings solution.

About half of indoor water is reusable, according to Phil Bobel, manager of environmental compliance for the City of Palo Alto. Why should we let good water literally go down the drain?

However, according to a USGS study, only about 2 percent of fresh water usage in California is for domestic use. The vast majority goes to agriculture.

"Regardless of how much or little of the state's water is consumed for urban use, all water conservation efforts by residents in Palo Alto and the rest of the Hetch Hetchy service area will help limit the diversion of water from the Tuolumne River," Cox said.

There are various ways to capture gray water. The simplest, cheapest, most primitive, but most labor-intensive method is buckets. Simply plug up the bath tub and haul buckets from the bathroom to the yard.

This requires a strong back, a significant amount of time, and when watering is over, you might be dirtier than before the shower, where all this water came from. But it's a fun (for me anyway) and very "green" way to keep the garden growing without running the hose.

For the more ambitious, pipes can be attached from showers, bathtubs and kitchen appliances to a gray-water hose. Many local plumbers that I talked with haven't even heard of gray water, and won't perform the retrofit.

Oakland-based Water Sprout specializes in water efficiency. The company helped design the San Francisco Academy of Science's living moss walls, and a number of Leadership in Energy and Environmental Design (LEED) projects. They also do work on rain collection and drip irrigation.

According to their website, "a typical family of four can conserve approximately 38,000 gallons of water each year using a gray water system." This translates to about $225 per year, at 2009 Palo Alto utility prices. Water Sprout quotes an installation price of a piped domestic system at $3,000 to $5,000, but this is for a high-end system with pumps and filtration.

Grey Water Guerillas, a Bay Area organization that trains plumbers and do-it-yourselfers, offers courses in installation of piped gray-water systems. They quote a sans-labor price of $150-$400, and also provide lists of local graduates from their program.

Some have concerns about the cleanliness and purity of gray water. It is certainly not for drinking, and is not recommended for watering vegetable gardens. Ornamentals and fruit trees are OK. Water that has come in contact with rotting food in a kitchen basin is not quite kosher, as is water with high levels of toxic cleaning agents.

The use of bio-degradable soap eases chemical concerns, and according to Yardener, also contributes in repelling pests.

In 2009, California adapted its water code to allow citizens to set up their own system. No permit is required for gray-water operations of less than 250 gallons per day, according to Cox, and "Palo Alto has historically approved installations on a case-by-case basis, although there have been very few applicants."

"The city also gives rebates for rain barrels, cisterns, green roofs, and other practices designed to reduce storm water runoff, such as installation of permeable pavement," she said.

There are financial savings, but they are not huge: Looking at our Palo Alto utilities bill, the bar graph shows that we went from 7 CCFs (1 CCF = 100 cubic feet of water, or about 748 gallons) to less than 3 CCFs at the same time last year. As of September 2009, water costs are $4.46 per CCF.

Though savings of approximately $20 per month are dandy, they are not the ultimate goal.

Gray-water benefits go beyond the more obvious plant growth and fresh-water savings. Reduced water withdrawal allows rivers and lakes to flow, restoring natural habitat for wildlife. Reduced strain on water-treatment plants saves on energy and purification chemicals. Gray water is filtered by plants, replenishing ground-water supplies safely.

Hauling buckets from the bathtub to the yard, I feel a connection to ancient ancestors who were all either farmers or hunters. Irrigation was one of the first inventions of human civilization and in many parts of the world it has not changed for 6,000 years.

There is something satisfying and profound in moving water by hand, utilizing an age-old technique.