While water lifting plays a recognized role in the global atmospheric power budget, estimates for this role in tropical cyclones vary from no effect to a major reduction in storm intensity. To better assess this impact, here we consider the work output of an infinitely narrow thermodynamic cycle with two streamlines connecting the top of the boundary layer in the vicinity of maximum wind (without assuming gradient-wind balance) to an arbitrary level in the inviscid free troposphere. The reduction of a storm’s maximum wind speed due to water lifting is found to decline with increasing efficiency of the cycle and is about 5% for maximum observed Carnot efficiencies. In the steady-state cycle, there is an extra heat input associated with the warming of precipitating water. The corresponding positive extra work is of an opposite sign and several times smaller than that due to water lifting. We also estimate the gain of kinetic energy in the outflow region. Contrary to previous assessments, this term is found to be large when the outflow radius is small (comparable to the radius of maximum wind). Using our framework, we show that Emanuel’s maximum potential intensity (E-PI) corresponds to a cycle where total work equals work performed at the top of the boundary layer (net work in the free troposphere is zero). This constrains a dependence between the outflow temperature and heat input at the point of maximum wind, but does not constrain the radial pressure gradient. We outline the implications of the established patterns for assessing real storms.