The global small hydropower market is set to grow from $2.7 billion in 2023 to $3.4 billion by 2033, at a compound annual growth rate (CAGR) of 2.5%, according to a new report from Allied Market Research.
The expansion of off-grid energy solutions and advancements in small-scale hydropower technology are driving market growth, the report highlights. Improved turbine efficiency and advanced control systems are boosting demand, particularly in remote areas where traditional energy infrastructure is limited. Small hydro projects provide a cost-effective and sustainable alternative to diesel generators, reducing both operational costs and environmental impact.
The mini hydropower segment held the highest market share in 2023 and is expected to maintain its lead through 2033, says the report. With greater capacity than micro hydropower, mini plants are better suited for powering larger communities and integrating with national grids. Civil works, which include the construction of dams, weirs, and channels, accounted for the largest market share in 2023. These infrastructure projects, essential for small hydro installations, are expected to experience the fastest growth during the forecast period. Hydropower plants within the 1-10MW range held the highest market share in 2023 and are projected to continue leading. These systems provide a balance between power generation and infrastructure investment, making them suitable for both grid-connected and off-grid applications.
The Asia-Pacific region is expected to experience the fastest growth in small hydropower adoption. Rapid population expansion and economic growth have increased energy demand, particularly in rural and remote areas. Small hydropower is emerging as a viable solution for meeting these needs while minimizing environmental impact.
