The paper makes an analysis of the status quo and existing issues of small hydropower (SHP) in China and based on the logistic growth curve model forecasts the installed capacity of SHP and cost of newly built SHP in the future. It also explores the opportunity of the clean development mechanism (CDM) in SHP projects and puts forward suggestions and recommendations on enhancing the SHP market competitiveness. Crown Copyright (C) 2008 Published by Elsevier Ltd. All rights reserved.