More than 90 per cent of Pioneer customers have returned signed contracts or expressions of interest in the program and 10,000 litre tanks have been installed or almost installed at 24 properties.

In 2013, TasWater failed to deliver rainwater tanks to the residents of Pioneer after the discovery of lead in the town's water a year earlier, which it continued to charge for.

To remedy the problem, a community water tank was placed in the middle of the town - making the mere collection of drinking water a laborious task.

However, research conducted by Macquarie University this year found the town's water supply had again recorded lead levels well above the Australian Drinking Water Guideline.

Dorset mayor Greg Howard said TasWater's response to the issue could have been handled much better.

"The time between signing of contracts and installation of tanks has been unacceptable," Cr Howard said, adding that because of TasWater's actions, problems would most likely be ongoing.

"Ten thousand litres is nowhere enough to supply a household and residents will be required to purchase multiple refills," he said.

TasWater said it would offer customers a free one-off rain-water tank refill.

"We have sent residents' information relating to a water conservation program, designed especially for Pioneer, to assist customers adjust to the transition from a reticulated supply to a rainwater tank supply," a TasWater spokesman said.

Research indicated the contaminated water might also have been a result of dilapidated drinking-water infrastructure, including household plumbing.