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The global small hydropower market reached a value of nearly USD 2.53 Billion in 2024. The market is assessed to grow at a CAGR of 2.90% during the forecast period of 2025-2034 to attain a value of around USD 3.37 Billion by 2034. The market is being driven by the rising production of renewable energy, the growing demand for decentralised energy solutions, the increasing focus on sustainability, the surging interest in modular and compact hydropower solutions, and technological advancements and innovations.
Base Year
Historical Year
Forecast Year
Global Small Hydropower Market Report Summary | Description | Value |
Base Year | USD Billion | 2024 |
Historical Period | USD Billion | 2018-2024 |
Forecast Period | USD Billion | 2025-2034 |
Market Size 2024 | USD Billion | 2.53 |
Market Size 2034 | USD Billion | 3.37 |
CAGR 2018-2024 | Percentage | XX% |
CAGR 2025-2034 | Percentage | 2.9% |
CAGR 2025-2034 - Market by Region | Asia Pacific | 3.5% |
CAGR 2025-2034 - Market by Country | India | 4.0% |
CAGR 2025-2034 - Market by Country | China | 3.3% |
CAGR 2025-2034 - Market by Capacity | Above 1 MW | 3.0% |
CAGR 2025-2034 - Market by Component | Electromechanical Equipment | 3.0% |
Market Share by Country 2024 | USA | XX% |
The rising interest in modular and compact hydropower solutions that can be scaled to meet specific energy needs is also evident. These solutions are easier to maintain, install, and adapt to various locations, such as remote and rural areas. Modular solutions can be tailored for different uses such as remote communities, off-grid applications, or small industrial setups, thereby being more versatile in meeting diverse energy needs.
Small hydropower plants are increasingly integrated into smart grids, allowing for real-time communication between power generation and consumers. Utilities can better manage power demand through demand response systems, improve energy management, and ensure efficient distribution of electricity by integrating small hydropower with smart grids, thus driving the growth of small hydropower market.
The increasing significance of floating hydropower technology areas that have limited land for the infrastructure of traditional hydropower is driving small hydropower market revenue. Floating hydropower projects can be installed in lakes and reservoirs, with a combination of solar panels that can be used as hybrid renewable energy platforms.
Value in USD Billion
2025-2034
Small Hydropower Market Outlook
*this image is indicative*
Traditionally, the market for small hydropower faced hurdles like high capital costs, very complex regulatory processes, and limited awareness in rural areas, thus impeding the small hydropower demand. Market players eventually overcame these issues by obtaining government subsidies and incentives that reduced the initial investment burden. Technological changes in turbine efficiency and automation were other factors that reduced the cost of running the power plants. Involvement of local governments and communities facilitated smooth approvals of projects. Also, a greater emphasis on environmental sustainability and eco-friendly designs also helped reduce regulatory hurdles, thus spreading it more extensively into disadvantaged areas.
A significant driver of the small hydropower market is off-grid and decentralised power solutions, mostly in remote and rural areas, thereby propelling the growth of small hydropower market. Small hydropower systems are particularly suited for such areas in which extension of traditional power grids is usually not economically feasible. Many developing country governments, such as those of BRIC countries, are focusing on rural electrification and industrialization. This has resulted in an increase in the adoption of the small hydropower technologies: these provide a reliable, sustainable, and cost-effective source of energy to the regions that lack access to centralised electricity infrastructure.
Rising focus on renewable energy; increasing emphasis on sustainability; growing interest in energy storage integration; and technological advancements and innovations are favouring the small hydropower market expansion.
With increased commitment by countries to cut down greenhouse gas emissions, the growing focus on renewable energy is offering profitable small hydropower market opportunities. Small hydropower is seen as a clean and renewable source of energy that can generate baseload and consistent power without producing greenhouse gases. Small hydropower also supports intermittent sources of renewable energy, namely wind and solar, ensuring a more reliable and predictable source of energy and giving it an added appeal in countries looking to diversify their renewable energy mix, as well as enhance their grid stability. In addition, government investments in expediting regulatory approvals, increasing the power grid, and reducing permitting delays for small hydropower projects help the market. In October 2023, the DOE of the United States revealed that 66 hydroelectric facilities across the country will benefit from incentive payments totalling more than USD 36.7 million.
The increasing focus on net-zero emissions targets from governments worldwide is driving an increased interest in small hydropower as a tool to end dependence on fossil fuels, decarbonize energy systems, and counteract climate change. The environment damage caused by small hydropower plants is notably minor compared to large-scale hydropower projects and fewer water resources and resource use, with no cause to significantly disrupt ecosystems on this scale. Rising in proportion to sustainability goals related to biodiversity and natural environments the small hydropower market value is increasing. The key players are also designing eco-friendly technologies such as new turbine designs and low-impact dam structures, which will be used to minimize disruptions to river ecosystems and reduce harm to aquatic life. During the forecast period, developers are likely to use environmentally friendly materials, including low-impact concrete and recycled steel, to improve the sustainability profile of small hydropower projects.
The increasing interest in energy storage integration is significantly shaping the small hydropower market trends and dynamics. Small hydropower offers reliable and consistent baseload power, making it critical for maintaining grid stability. Moreover, small hydropower, when paired with energy storage, becomes more resilient and flexible, especially for use in off-grid or remote areas. By combining small hydropower with energy storage, it can be used in demand response programmes to store energy during low-demand periods and release it during high-demand periods. This reduces the need for conventional backup generation and supports the management of peak loads, making small hydropower a more viable and competitive option for grid operators.
Technological advancements and innovations making hydropower technology more cost-effective, efficient, and environmentally friendly are revolutionising the small hydropower market landscape. The development of advanced turbines that can generate more electricity from the same water flow and are optimised for small hydropower projects is anticipated to aid the market. Various small hydropower plants are also equipped with digital control systems for real-time monitoring, remote control of plant operations, and data analytics. Such plants support operators in optimising power generation processes and detecting inefficiencies. Furthermore, there is a growing deployment of AI-based algorithms and IoT sensors to monitor the water flow, turbine performance, pressure, and other operational parameters, minimising downtime and ensuring optimal efficiency. Technologies like AI and machine learning also facilitate predictive maintenance, hence reducing the risk of unpredictable downtimes and minimising operational costs.
Legislative reforms, public acceptance, and investment are the key market trends.
“Global Small Hydropower Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:
On the basis of capacity, the market can be divided into the following:
On the basis of type, the market can be divided into the following:
On the basis of component, the market can be divided into the following:
Based on region, the market can be segregated into:
CAGR 2025-2034 - Market by | Capacity |
Above 1 MW | 3.0% |
Up to 1 MW | 2.4% |
CAGR 2025-2034 - Market by | Component |
Electromechanical Equipment | 3.0% |
Electric Infrastructure | 2.8% |
Civil Works | 2.6% |
CAGR 2025-2034 - Market by | Region |
Asia Pacific | 3.5% |
Middle East and Africa | 2.9% |
Latin America | 2.6% |
North America | 2.2% |
Europe | 2.1% |
Small hydropower growth is driven by demand for clean energy, efficiency, and government support.
Rising demand for clean, renewable energy and incentives from the government for sustainable power generation to support more hydropower systems. As per small hydropower market analysis, projects with capacities up to 1 MW are attractive for off-grid or remote applications, posing economically viable solutions for rural electrification. Economies of scale and efficient energy production characterise the 2-10 MW range. These include improvements in turbine technology, environmental impact, increased focus on energy security, and decarbonization, which are leading to growth in the market.
Micro hydropower is gaining traction for decentralised, off-grid energy solutions in remote areas.
The micro hydropower market is on an uptrend, and technology is well poised as a decentralised, off-grid energy solution- ideal for isolated and rural areas. Such systems are typically sized under 100 kW, cheap, environmentally friendly, and relatively simple to install with minimal civil works. They will provide reliable small-scale energy production that will benefit particularly communities outside the reach of the central grid. There is increasing demand for mini hydropower (100 kW-2 MW), ensuring greater demand for medium-scale, affordable renewable energy solutions both for local industries and agricultural applications.
Small hydropower growth is driven by advances in electromechanical equipment, infrastructure, and civil works.
The small hydropower ecosystem is driven by three key components: electromechanical equipment, electric infrastructure, and civil works. As per the small hydropower industry analysis, electromechanical equipment, including generators, turbines, and control systems, play a crucial role in converting water flow into electricity.
Electric infrastructure, encompassing transformers, grid connections, and transmission systems, ensure efficient energy distribution. Meanwhile, civil works refer the construction of dams, weirs, and powerhouses. Advances in each component, including the development of more efficient turbines and improved grid integration, are expected to drive the market expansion.
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North America Small Hydropower Market Opportunities
The North America small hydropower demand forecast is being driven by increasing demand for clean energy and favourable government policies. In the U.S., small hydropower projects contribute around 3% of the country’s total hydroelectric capacity, with the Department of Energy actively promoting their development. Canada also boasts significant untapped potential for small hydropower, particularly in remote areas. The growing focus on renewable energy and energy storage solutions, alongside incentives and funding for green projects, is expected to accelerate the small hydropower market growth across North America.
CAGR 2025-2034 - Market by | Country |
India | 4.0% |
China | 3.3% |
Saudi Arabia | 3.1% |
Brazil | 3.0% |
Canada | 2.5% |
Mexico | 2.5% |
UK | 2.5% |
Australia | 2.4% |
USA | 2.2% |
Japan | 2.1% |
Germany | 2.0% |
France | 1.9% |
Italy | 1.7% |
Europe Small Hydropower Market Dynamics
The Europe small hydropower market expansion is being driven by the region’s strong renewable energy policies and ambitious sustainability goals. As per the European Small Hydropower Association (ESHA), small hydropower represents about 10% of Europe’s total renewable electricity production. Countries like Norway, Austria, and France are leaders, with thousands of small hydropower plants in operation. The European Union’s Green Deal and incentives for green energy technologies are further fuelling the market growth, promoting sustainable and decentralised energy solutions across the region.
Asia Pacific Small Hydropower Market Trends
The Asia Pacific small hydropower industry is expanding due to rising energy demands and strong government support for renewable energy. Countries like China, India, and Nepal are investing in small hydropower projects to harness their abundant water resources. China, in particular, leads the region, with thousands of small hydropower plants already operational. According to the International Energy Agency (IEA), small hydropower contributes significantly to the region’s renewable energy goals, supported by favourable policies, subsidies, and infrastructure development.
Latin America Small Hydropower Market Insights
The Latin America market for small hydropower is gaining momentum due to increasing demand for renewable energy and government support. Countries like Brazil, Chile, and Argentina are tapping into their vast river systems to develop small hydropower projects. According to the Latin American Energy Organisation (OLADE), small hydropower contributes significantly to the region's renewable energy capacity, with over 15,000 MW of potential identified. Governments are offering incentives, tax breaks, and financing to accelerate project development, supporting energy security and sustainability.
Middle East and Africa Small Hydropower Market Drivers
The Middle East and Africa (MEA) small hydropower market is driven by increasing energy demand, the need for sustainable power solutions, and government initiatives promoting renewable energy. Many countries in the region, such as Ethiopia, are focusing on harnessing their untapped hydroelectric potential. With abundant river systems and ongoing infrastructure development, small hydropower offers a cost-effective, environmentally friendly energy source.
Global small hydropower market players are attempting to enhance the efficiency of energy use, sustainability, and the utilisation of untapped hydro potential. Further, they are emphasising the optimisation of technologies used in small hydro systems, combined with upgraded infrastructure. The efforts of small hydropower companies are directed towards reducing costs, increasing project feasibility, and supporting renewable energy goals, making small hydropower a viable solution for both developing and developed markets.
Voith GmbH & Co. KGaA is one of the world's leading mechanical engineering companies which was founded back in 1867 and based in Germany. It offers solutions within the areas of robotics, hydraulics, pneumatics, cooling, hydropower components, brake systems, motors, and transmissions. The segments that the company caters to include raw materials, energy, transport, automotive, and paper. In the markets for raw materials, energy, transportation and automotive, paper, Voith establishes standards with its extensive spectrum of systems, products, services, and digital applications.
ANDRITZ AG, an Austrian based company founded in 1852, is one of the prime suppliers of equipment, m...
Siemens AG is a technology firm with its headquarters in Germany, established in 1847. It deals prim...
*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*
Other major players in the global small hydropower market report are Toshiba Energy Systems & Solutions Corporation ("ESS") and Canyon Hydro, among others.
*While we strive to always give you current and accurate information, the numbers depicted on the website are indicative and may differ from the actual numbers in the main report. At Expert Market Research, we aim to bring you the latest insights and trends in the market. Using our analyses and forecasts, stakeholders can understand the market dynamics, navigate challenges, and capitalize on opportunities to make data-driven strategic decisions.*
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The market is projected to grow at a CAGR of 2.90% between 2025 and 2034.
The major drivers of the market include the expanding financial incentives, various governments initiatives, increasing investments in off-grid energy generation, and growing concerns about greenhouse gas (GHG) emissions.
An increase in the production of energy from renewable sources and integration of Internet of Things (IoT) with SHP components are the key industry trends propelling the growth of the market.
The major players in the industry are Voith GmbH & Co. KGaA, ANDRITZ AG., Siemens AG, Toshiba Energy Systems & Solutions Corporation ("ESS"), and Canyon Hydro, among others.
The microhydro turbine transforms the mechanical energy of flowing water into electrical energy by turning a generator and a shaft. Turbines exist in a variety of shapes and sizes, and they are matched based on requirements, energy goals, stream characteristics, and budget.
Small hydropower systems can offer clean, sustainable, and relatively inexpensive energy. They can be built anywhere there is sufficient water flow and head to support electricity generation, even in remote or undeveloped areas.
In 2024, the market reached an approximate value of USD 2.53 Billion.
The market is estimated to witness healthy growth in the forecast period of 2025-2034 to reach a value of around USD 3.37 Billion by 2034.
Explore our key highlights of the report and gain a concise overview of key findings, trends, and actionable insights that will empower your strategic decisions.
REPORT FEATURES | DETAILS |
Base Year | 2024 |
Historical Period | 2018-2024 |
Forecast Period | 2025-2034 |
Scope of the Report |
Historical and Forecast Trends, Industry Drivers and Constraints, Historical and Forecast Market Analysis by Segment:
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Breakup by Capacity |
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Breakup by Type |
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Breakup by Component |
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Breakup by Region |
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Market Dynamics |
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Competitive Landscape |
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Companies Covered |
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Australia
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India
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Philippines
40th Floor, PBCom Tower, 6795 Ayala Avenue Cor V.A Rufino St. Makati City,1226.
+63-287-899-028, +63-967-048-3306
United Kingdom
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United States
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Vietnam
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United States (Head Office)
30 North Gould Street, Sheridan, WY 82801
+1-415-325-5166
Australia
63 Fiona Drive, Tamworth, NSW
+61-448-061-727
India
C130 Sector 2 Noida, Uttar Pradesh 201301
+91-858-608-1494
Philippines
40th Floor, PBCom Tower, 6795 Ayala Avenue Cor V.A Rufino St. Makati City, 1226.
+63-287-899-028, +63-967-048-3306
United Kingdom
6 Gardner Place, Becketts Close, Feltham TW14 0BX, Greater London
+44-753-713-2163
Vietnam
193/26/4 St.no.6, Ward Binh Hung Hoa, Binh Tan District, Ho Chi Minh City
+84-865-399-124
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