Valorization of dairy-industry wastewater and stormwater energy is a new approach to establishment of sustainable agriculture, which is based on use of stormwater containing dairy wastewater for production of yeast-algae (Saccharomyces cerevisiae–Scenedesmus abundans) biomass and biofuel. Dairy wastewater (DW) has high COD (68,000 mg/L) and BOD (31,800 mg/L). To cultivate yeast-microalgae, dilution was performed using stormwater with the dilution rate of 10 to 100%. The objective of this study was to treat the dairy wastewater and stormwater (SW) with microalgae. In this study cultures of Scenedesmus abundans (microalgae), Saccharomyces cerevisiae + Scenedesmus abundans (yeast + microalgae) and Scenedesmus abundans + Chlorella minutissima (microalgae + microalgae) were cultivated on different dilution ratios (10–100%). The artificial consortium of yeast and microalgae has been able to remove 41.7% of total nitrogen (TN), 60.9% of total phosphorus (TP), 83% of COD, and 90% of BOD for 14 days. Reduction in bacterial load was also reported. Dry weight of yeast-algal biomass was found to be 1.9 g/L in DW and 1.2 g/L in control medium. Moreover, increased lipid content (27.5%) was also observed in DW cultivated biomass as compared to the control (21%) and further an increase in unsaturated fatty acids (USFA) and PUFA content was also observed. Increase in protein content while decrease in carbohydrate content was reported. Chlorophyll a and carotenoid content were high in yeast–algal pellets cultivated in DW and SW. © 2022, The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.