With many states recently enacting either renewable energy mandates or goals,the small hydropower industry has a unique opportunity to supply a growing portion of U.S. electricity supply. But the procedure to obtain a license for project development is unwieldy, increasingly wrought with regulatory hurdles at both the state and Federal levels. Government incentives exist that promote the development of small hydropower,but are insufficient to overcome the regulatory barriers faced by the industry. Although it is possible for small hydropower to supply a growing share of energy production in the U.S., it is unlikely that the full potential will be realized without substantial changes to the renewable energy regulatory system. This study describes the current state of the regulatory system governing the development of small hydropower facilities in the United States. A basic overview of hydroelectric technology is discussed, followed by a detailed description of the process through which a project developer must apply for a Federal license to construct and operate a hydropower project. The current state of the U.S. small hydropower industry is examined, considering the potential opportunity for the industry to supply a growing share of the U.S. electricity supply. This analysis is supplemented by a discussion of the costs of project construction and an investigation into the regulatory barriers to project development. / text