During distillation using the T500 and the Alembic Condenser, you will run a fair amount of water through the still to control the temperature and condense the vapour.
Recycling water is only really feasible for the Turbo 500. If using the Alembic Pot Still, you would need very large storage tanks.
You can recirculate water during a run, however, you would need to find a way to cool the water before it goes back into the still. We have seen set-ups with one big barrel (~200 - 300 L (52.8-79.2 US Gal)) of water with plenty of ice and a submersible pump which is connected to the water inlet of the still. The water is then be pumped through the still and the water outlet feeds into the same barrel. You should ensure that it is never submerged in the water. The water is thus recycled, however, they must always ensure that the water temp in the barrel is below 20°C (68°F).
We've heard of some people collecting water from their gutters around their houses which is at a cool enough temperature to use and run through and it's going to waste anyway. As the water never touches the distillate it doesn't have to be perfectly clean water but it should always be free of any debris etc.
Other setups include having 2 x 200 L (52.8 US Gal) barrels and a submersible pump where one barrel contains all the cooling water (200 L (52.8 US Gal) should be enough for a T500 run) and is connected via the pump to the water inlet of the condenser.
The tubing which is connected to the outlet of the condenser runs into the second tank which is empty at the beginning of the run but will fill up with the hot water during the run. Then for the next distillation (or after the water has cooled down below 20°C (68°)), the tanks can be switched over and run again.
If you prefer, you can collect the water you pass through the still from your tap. When it's cool, you can reuse it for any household applications like watering plants etc as it doesn't touch any alcohol, it's simply hot water.
Alternatively, if you'd rather not use any water at all, use an Air Still which uses air, not water to condense.
Check out this blog for more water saving tips.