Small Hydropower Global Market Opportunities and Strategies to 2034

This report describes and explains the small hydropower market and covers 2019-2024, termed the historic period, and 2024-2029, 2034F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global small hydropower market reached a value of nearly $3.03 billion in 2024, having grown at a compound annual growth rate (CAGR) of 3.11% since 2019. The market is expected to grow from $3.03 billion in 2024 to $3.57 billion in 2029 at a rate of 3.33%. The market is then expected to grow at a CAGR of 2.91% from 2029 and reach $4.12 billion in 2034.

Growth in the historic period resulted from subsidies and financial incentives for small hydro, increasing electrification, global investments in sustainable energy projects and rise in water resource management and multipurpose use. Factors that negatively affected growth in the historic period were the high upfront capital costs and competition from cheaper renewables such as solar and wind.

Going forward, growing cross-border green energy trade initiatives, focus on reducing carbon emissions, rising demand for renewable energy and favorable government initiative will drive growth. Factors that could hinder the growth of the small hydropower market in the future include long payback periods, seasonal flow variability and droughts reducing generation reliability and impact of trade war and tariff.

Asia Pacific was the largest region in the small hydropower market, accounting for 49.69% or $1.5 billion of the total in 2024. It was followed by South America, Western Europe and then the other regions. Going forward, the fastest-growing regions in the small hydropower market will be Western Europe and Eastern Europe where growth will be at CAGRs of 4.98% and 4.71% respectively. These will be followed by South America and Africa where the markets are expected to grow at CAGRs of 4.14% and 3.97% respectively.

The global small hydropower market is fragmented, with large number of small players operating in the market. The top ten competitors in the market made up to 10.29% of the total market in 2023. Andritz AG was the largest competitor with a 2.00% share of the market, followed by Voith GmbH & Co. KGaA with 1.68%, Siemens Energy AG with 1.40%, GE Renewable Energy with 1.15%, Toshiba Energy Systems & Solutions Corporation with 1.00%, PJSC RusHydro with 0.87%, Marubeni Corporation with 0.65%, CKD Blansko with 0.51%, Kolektor Group with 0.41% and Gilbert Gilkes & Gordon Ltd. with 0.22%.

The small hydropower market is segmented by type into micro hydropower and mini hydropower. The mini hydropower market was the largest segment of the small hydropower market segmented by type, accounting for 77.83% or $2.36 billion of the total in 2024. Going forward, the mini hydropower segment is expected to be the fastest growing segment in the small hydropower market segmented by type, at a CAGR of 3.68% during 2024-2029.

The small hydropower market is segmented by application into civil construction, power infrastructure and other applications. The power infrastructure market was the largest segment of the small hydropower market segmented by application, accounting for 47.38% or $1.43 billion of the total in 2024. Going forward, the power infrastructure segment is expected to be the fastest growing segment in the small hydropower market segmented by application, at a CAGR of 3.83% during 2024-2029.

The small hydropower market is segmented by capacity into up to 1 MW and 1-10 MW. The up to 1 MW market was the largest segment of the small hydropower market segmented by capacity, accounting for 59.44% or $ 1.8 billion of the total in 2024. Going forward, the 1-10 MW segment is expected to be the fastest growing segment in the small hydropower market segmented by capacity, at a CAGR of 3.74% during 2024-2029.

The small hydropower market is segmented by end-user into commercial and utility-scale. The utility-scale market was the largest segment of the small hydropower market segmented by end-user, accounting for 65.40% or $1.98 billion of the total in 2024. Going forward, the commercial segment is expected to be the fastest growing segment in the small hydropower market segmented by end-user, at a CAGR of 3.38% during 2024-2029.

The top opportunities in the small hydropower market segmented by type will arise in the mini hydropower segment, which will gain $467.97 million of global annual sales by 2029. The top opportunities in the small hydropower market segmented by capacity will arise in the Up to 1 MW segment, which will gain $291.69 million of global annual sales by 2029. The top opportunities in the small hydropower market segmented by application will arise in the power infrastructure segment, which will gain $297.88 million of global annual sales by 2029. The top opportunities in the small hydropower market segmented by end user will arise in the utility-scale segment, which will gain $350.16 million of global annual sales by 2029. The small hydropower market size will gain the most in China at $110.69 million.

Market-trend-based strategies for the small hydropower market include focus on digital & modular innovation, efficiency in low-flow / low-head settings, hybrid deployments and stronger environmental compliance and focus on the development of canal-based mini-hydro turbines designed.

Player-adopted strategies in the small hydropower market include focus on expanding its business capabilities through securing new orders and focus on enhancing its business capabilities through partnerships.

To take advantage of the opportunities, the analyst recommends the small hydropower market companies to focus on digital innovation and efficiency in challenging deployments, focus on canal-based mini-hydro solutions for decentralized energy, focus on mini hydropower expansion, focus on 1-10 mw small hydropower projects, expand in emerging markets, focus on expanding distribution networks and strategic partnerships, focus on competitive and value-based pricing strategies, focus on targeted awareness campaigns and stakeholder engagement, focus on digital and local marketing integration, focus on power infrastructure investments, focus on commercial small hydropower projects.