Any discussion about water and electrical lighting really must include the all-important topic of safety. Just as devices such as electric motors and in-pool lights must be grounded and steel structures bonded, so too lighting around bodies of water be installed following basic safety guidelines.
Ensuring that lighting systems used near water are safe starts with the equipment, which means using 12-volt lighting systems. You can use 120-volt systems, which must be installed by a licensed electrician, but I believe and argue that for the vast majority of applications, 12-volt systems are the best choice because the lower voltage is inherently less hazardous. (LED systems have come on strong in a big way in recent years and can provide high levels of safety and performance, but only if you use the right equipment. That's a separate discussion we can cover in a future issue.)
The quality of the equipment is equally important. For years, I've also argued that the inexpensive plastic fixtures designed for the do-it-yourself market, sold mainly at a "box stores," are not suitable for landscape lighting of any kind and especially applications near water. These products are extremely susceptible to damage and in general have inferior service lives. Instead, you should always think in terms of using quality cast brass or other non-ferrous (non rusting) metal alloy fixtures such as copper or stainless steel that are designed to endure the rigors of outdoor applications.
This is also why wiring next to water should always be installed in conduit. In my work, all cable runs are in conduits and all connections are made with weathertight heavy-duty splice kits. Some installers will argue that direct burial cable is acceptable in some applications and certainly more affordable. When you factor in the added safety and durability of conduit systems, however, as well as the ease of replacing wiring or expanding systems, using conduit is the only way to go.
The bottom line is that you do not want any part of the system, the fixtures, transformers or wiring, to become submerged in water at any time. To be clear, that means that low-voltage garden lighting equipment should never be used in water that comes in contact with people. And you want the entire systems to be as resistant to damage as humanly possible.
The next layer of protection involves proper grounding of transformers. Individual low voltage fixtures do not need to be grounded, but all transformers must be grounded in accordance with both manufacturer recommendations and the National Electric Code. Also, every component of a lighting system that can potentially come in contact with water must be protected with ground-fault circuit interrupters (GFI).
In some instances pool-and-spa rated transformers must be used. Always make it a point to know the NEC and local safety codes while working around pools and spas for the safety of your client and for your own potential exposure to liability.
Finally, and equally important to all of the above, fixtures installed around water must be set back from the water's edge. Municipalities vary in their requirements, but as a matter of general practice, I observe a six-foot set back. Essentially the idea is that you don't want someone being able to touch a light fixture while part of his or her body is still in the water. It would be a highly improbably scenario, but in the event the system loses ground for some reason and there's 120 volt current flowing through the fixture itself, a person partially submerged who touches such a fixture could be seriously injured.