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Home / Technical Articles / What would be the cost of micro hydro plant?
The mini-hydro plant in Sitio Campuestohan will provide power for 40 households
The mini-hydro plant in Sitio Campuestohan will provide power for 40 households

In the examples examined in the five countries, the capital cost13 of micro hydro plants, limited to shaft power, ranged from  US$714 (Nepal, Zimbabwe)  to US$1,233 (Mozambique).  The average cost is US$965 per installed kW which is in line with the figures quoted in some studies.  The installed costs for electricity generation schemes are much higher.

The installed cost per kW ranged from US$1,136 (Pucará, Peru) to US$5,630 (Pedro Ruiz, Peru) with an average installed cost of  US$3,085. The data for the complete sample and detailed summary of the financial analyses of the 16 sample projects is provided in the annex to this report.

The Cost Per Kilowatt Installed

An important observation is that the cost per installed kilowatt is higher than the figures usually cited in the literature. This is partly due to the difficulty analysts have in establishing full costs on a genuinely comparative basis.  A significant part of micro hydro costs can be met with difficult to value labour provided by the local community as ‘sweat equity’.

Meaningful dollar values for local costs are difficult to establish when they are inflating and rapidly depreciating relative to hard currencies.  In addition, there is little consistency in the definition of boundaries of the systems being compared, for instance, how much of the distribution cost, or house wiring, is included, how much of the cost of the civil works contribute to water management and irrigation, and so forth.

In this article very great care was taken to produce estimates of the actual costs on a rigorously comparable basis. It is for example of paramount importance to distinguish between schemes limited to mechanical power only and schemes which include electricity generation.

As with any de-centralised energy supply system, the comparison of actual costs at the ‘micro’ level of individual plants can also be misleading.  Successful programmes require investments in the systems necessary for training, repair, and marketing. 

The critical issue is that these tasks exhibit substantial economies of scale in that the cost per micro hydro plant installed falls as the number of plants increases. Comparisons based on average costs will therefore be strongly influenced by the number of plants built.

Estimates of these ‘macro’ costs associated with developing and supporting a programme – sometimes referred to as “system overhead costs”14 are also difficult to establish, particularly as many of the costs associated with Research and Development and the training of engineering workshops are ‘sunk costs’ which took place over many years.

Summary of Financial Returns on Sample Micro Hydro Plants After Financing
Summary of Financial Returns on Sample Micro Hydro Plants After Financing


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Edvard Csanyi

Electrical engineer, programmer and founder of EEP. Highly specialized for design of LV/MV switchgears and LV high power busbar trunking (<6300A) in power substations, commercial buildings and industry facilities. Professional in AutoCAD programming.


  1. Eduardo Garcia
    Dec 10, 2011

    I send the video of my screw lowland rivers like the Nile or the Ganges, in my case the Parana where the test and working very well acted.
    The production cost is lower and its components can be manufactured in the country that place.

  2. Hannes
    Oct 09, 2011

    Hi Edvard. Great article! Hope I can expand or contribute a little further? We are a South African based technology start up which has just completed about years’ R&D on a new turbine design and which is now international patents pending status, and ready to go to market. I though I would chip my two cents in on the micro hydro costs, and you can see more about our cost comparisons on our website. just a disclaimer, we present an encapsulated ‘rule of thumb” overview on technologies currently deployed in Africa, and hope it edifies your readers.

    • Edvard
      Oct 11, 2011

      Hi Hannes! It would be very nice of you, if you could contribute and describe a little more on this technology (patent) by writing and technical article about it. You can link your site’s pages of course.


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38  +    =  forty three

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