On the dusty, often unpaved roads that cross the Navajo Nation, pickup trucks hauling water are a common sight. Navajo Nation residents are 67 times more likely than other Americans to lack running water in their homes.

But outside more than 500 homes on the Navajo reservation in Arizona and New Mexico are devices that aim to help tackle this plumbing poverty. These “hydropanels” absorb water from the air and deliver it straight to a dispenser inside the house. Each one produces around five liters (1 gallon) daily, and two panels are enough to supply a family’s drinking water, according to Source, the Arizona-based company that produces them.

Jerry Williams, a former president of the Navajo’s LeChee Chapter in northern Arizona, where the first panels were installed, said he initially doubted they would work. One family invited him for a look. “The older grandma, she turned the water on, and she said, ‘Look, I’m getting water inside my house.’ That’s what made me a believer.”

Where these families used to make water runs two times a week or more, said Williams, they now get their drinking water from the panels.

More than 2 billion people lack adequate access to water, and half the world will live in water-stressed areas by 2025. As the climate crisis accelerates – causing droughts to intensify, glaciers to melt and freshwater sources to become more depleted – water shortages are predicted to become more acute.

Source is one of several companies that say they can offer a solution to the problem of water scarcity through a technology called atmospheric water generation (AWG): the process of pulling clean water out of the air. It’s not a new technology but has traditionally required large amounts of energy and been limited to places with high humidity levels. Companies like Source say they have solved these challenges to create a technology powered by renewable energy and able to harvest drinking water from the air even in arid climates. But some water industry experts question the big claims being made about its potential.

Source (originally called Zero Mass Water) was founded by Cody Friesen, an associate professor of materials science at Arizona State University. Friesen said he became passionate about water scarcity on trips to Indonesia and Central America, which had “10 feet of rainfall” but “nothing to drink”, he said.

Looking for a way to harness water in the air – the air holds six times as much water as the world’s rivers – he developed panels that use fans to draw in air. Once inside the device, the water vapor is converted into liquid, filtered and then mineralized. The panel’s only energy source is sunlight and it can work in a wide variety of locations, he said, including those with low humidity, high levels of pollution and areas that are entirely off grid.

Source sells its hydropanels for use in hotels, resorts, restaurants, stores and homes (including Robert Downey Jr’s house). It also has water farms in Arizona, Dubai and Australia. Recently, Source contracted with a Saudi Arabian company to supply 2m plastic-free water bottles a year for a new eco-resort.

The company has also installed panels in schools, villages and hospitals in countries including India, the Philippines and Kenya, in partnership with NGOs, development banks and local governments.

In Colombia, the company installed panels in Bahia Hondita, a remote community of Wayuu indigenous people on the tip of the Guajira peninsula, an arid area that has been devastated by drought. Many Wayuu people must walk hours to find potable water, according to Conservation International, which worked with Source on the project. The company set up 149 panels last year, aiming to supply drinking water to the nearly 500 people who live there.

The panels continuously send production data back to the company in Arizona. The Wayuu panels produce 3.2 liters (0.8 gallons) a day on average, Source said, while the Navajo panels produce between 2 and 4 liters (0.5 to 1 gallon) each, depending on where they are located on the reservation.

Source has raised more than $100m from investors such as BlackRock and Breakthrough Energy Ventures, Bill Gates’s climate fund. Last month, the company received $7m from Chamath Palihapitiya, one of Silicon Valley’s most prominent venture capitalists, to install hydropanels in drought-stricken parts of California.

The company hit a bump in 2019 when it tried to respond to Flint’s water crisis. Source proposed installing up to 1,000 panels near the city’s water treatment plant, aiming to bottle and sell the water, with proceeds going to improve Flint’s water infrastructure.

The plan divided the city council. Some council members championed the proposal, but others such as Kate Fields (now the city council’s president), were unpersuaded by Source’s business plan. During one city council meeting, Fields argued that it would be cheaper to bring bottled water in trucks from Denver than to bottle it from the hydropanels.

Although Source received approval from the council, Friesen said they later discovered that the ground near the plant was too toxic for the panels. The company scrambled to find another location but could not muster support from local neighborhood groups. It ended up installing fewer than 20 panels around the city.

“It was a learning experience for me,” Friesen acknowledged, calling the episode “painful”. But he said “we’re not done in Flint. It’s just going to take a little longer.”

Within some parts of the water industry, Source has faced heavy criticism about costs and productivity. A two-panel array runs between $5,500 and $6,500 including installation, and each one weighs 340 pounds and requires 30 square feet of space. Although a panel can in theory produce five liters of water a day, Source’s calculations show that with clouds or low humidity, production slows to less than two liters (0.4 gallons) and grinds to a halt in freezing conditions.

The “fundamental problem” with the hydropanel is that it “makes very, very little water for the size and price”, said Christopher Gasson of Global Water Intelligence, a market intelligence firm. He noted that, according to the UN, a person needs on average 50 liters of water a day to meet basic needs for drinking, cooking and cleaning. Gasson estimated that it would take 17 hydropanels to meet that figure for a single person.

The hydropanels would “not under any circumstances” be a solution to water scarcity, Gasson said. Even isolated communities, like the Wayuu, would be better off collecting rainwater and drinking it, he said. The water crisis is really a “challenge of public infrastructure finance” that can be addressed with improvements to municipal water supplies, water filtration units and water kiosks, said Gasson.

Other analysts echoed this skepticism. Source is “way, way, way overvalued”, said Rhys Owens of BlueTech Research, another market intelligence company, adding that AWG might be viable where “you literally, absolutely have no other source of water”.

A research paper published in 2021 concluded that AWG could be an “attractive substitute” for bottled water but “does not provide economically viable alternatives for potable tap water”.

Friesen rejects the criticisms. Source is “a pure disruptor”, he said, and “there will always be naysayers”. He expects productivity to rise and costs to fall quickly. Each panel’s raw materials cost $200, he said, and the current retail price reflects the challenges of small-scale production (Source makes 1,000 panels a month). Friesen compared the hydropanels to other renewable technologies, such as solar panels or lithium-ion batteries, which were also criticized for being too costly or ineffective but have since seen costs plunge.

He also said that while infrastructure improvements will benefit large metropolitan areas, that will not necessarily be the case in more isolated areas, where water “is hard to move around”. Rainwater collection is “not a reliable or resilient solution”, said Friesen, because it relies on predictable rainfall, “which is less and less common due to climate change”.

The company is creating its own line of plastic-free bottled water and continuing to install hydropanels in remote communities. Friesen said he invented the hydropanels with the hope of creating “a world where no women and girls ever fetched water ever again” and “there were no plastic water bottles floating around”.

But he faces an uphill climb convincing critics. It is “not going to be an enormous gamechanger”, said Owens, unless there is a substantial increase in the amount of water that can be collected.