When one thinks of hydroelectric power, images of enormous man-made dams and reservoirs are likely produced. While those projects generate thousands of megawatts of power for millions of users, some individuals and small businesses have installed hydroelectric generators on much smaller scales to provide electricity for their own use. These installations often don't require any damming: a portion of the water source's flow is diverted through a pipe along its natural vertical run, to be returned immediately after exiting the turbine.  Micro hydro, as it's called, could prove to be an important addition to the renewable energy picture. But while the technology has many advantages over wind and solar in individual installations, it has thus far been difficult to implement as a broad solution. [1,2]
The most immediate advantage of micro hydro power is that it's always on. Water flow may ease with the seasons, but a baseline of energy is always present. In contrast, solar energy is only present during the day, and under favorable weather conditions, while wind energy depends on many factors and can be difficult to predict. Another important benefit of micro hydro is price, with startup costs around half that of solar. In fact, the World Bank estimates the cost of micro hydro at 6 cents/hour, compared to 7 cents for wind and 10 cents for solar. However, in most places, this advantage is mitigated by government subsidies, which favor solar and wind installations over micro hydro. [1,2] Furthermore, advances in micro hydro technology have made installations simpler, easier to maintain, and able to harness energy from more remote water sources. [1,2]
The major caveat is that micro hydro depends on access to a suitable source of flowing water, whereas wind and solar energy are present everywhere, to some degree. [1,2]
Even with access to a suitable water source, every micro hydro installation is unique, meaning equipment and configurations must be custom-tailored. Thus, companies are prevented from providing solutions "out of the box," as they do to an extent with wind and solar. Furthermore, governments are discouraged from subsidies by the need to study the environmental impact of each micro hydro installation. [1,2]
In the developed world, the availability of low-cost electricity via connection to expansive grids limits the number of users for whom other sources of electricity represent an attractive proposition. In the developing world, where electricity isn't so cheap, or simply not available, and where water resources are often accessible, micro hydro is making inroads. [2,3] In the Himachal Pradesh region of India, for example, numerous sites appropriate for micro hydro installations have been identified, and several projects are in progress.  Impressively, the World Bank is currently financing around $1B in micro hydro projects in the developing world. 
As the benefits of micro hydro become more widely known, and as other sources of energy begin to come at more of a premium, the 70% of the world's hydroelectric capacity that is estimated to be untapped will become increasingly attractive to users. 
© Matthew Potter. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
 S. Davis, Microhydro: Clean Power from Water (New Society Publishers, 2003).
 S. J. Wachter, "Pint-Size Dams Harness Streams ," New York Times, 16 Mar 09.
 A. J. Sinclair, "Assessing the Impacts of Micro-Hydro Development in the Kullu District, Himachal Pradesh, India," Mountain Research and Development 23, No. 1, 11 (2003).