EVAPORATIVE air conditioners are using a "significant proportion" of Tamworth's water - about four million litres a day - which is why the council is offering residents a rebate for installing ceiling fans.
Tamworth Regional Council water director Bruce Logan said while it was hard to talk about conserving water in the middle of a heat wave, the city was currently using 20 megalitres a day.
"Our target is 16 megalitres, so we're well above that - I believe the main reason for that increase is people using evaporative air conditioners," Mr Logan said.
"We're certainly seeing that evaporative air conditions can use quite a lot of water - four megalitres a day, that's a significant proportion of our water consumption."
To help people beat the heat and save water, the council is offering people a $50 rebate per ceiling fan installed.
Mr Logan hoped residents with evaporative air conditions would consider installing a ceiling fan and picking up the rebate.
"Hopefully that means they might use their evaporative air conditioner less," he said.
Ceiling fans are one of the many items recently added to council's water rebate scheme - $500 will be handed back to residents if they install a greywater treatment system, which disperses recycled water in to the garden via an irrigation system.
Residents can save between $200 and $1000 when they install a rainwater tank, depending on its size.
Businesses can also benefit, with rebates of hundreds of dollars for commercial washing machines, dishwashers, and chemical and steam cleaners.
Tamworth mayor Col Murray said the council wanted to refresh its whole water rebate program.
"It is just trying to incentivise the community to move towards more water saving initiatives," Cr Murray said.
"We have seen some really great ones over the last 20 years. The water consumption for the whole city hasn't gone up for those 20 years.
"That's because of some of those initiatives that the council incentivised the community."