I know in the UK removal of water from a water source above a certain volume requires a licence and a whole set of criteria to meet. Certainly for water supply to your house. A mate lived in a cottage on the family farm and all of them got their water from up in the moors. They had a nice UV and filtration system to keep it all safe too. Just had to pay a fair amount a year as it was classed as extraction.
I have no idea whether a hydro system n is the same. Iirc that strawbridge ex army TV presenter did a homebuilt system and had to get permission for extraction even though I think it fed back into the stream.
There's a load of small scale rural schemes in rural UK. Knoydart has a big one feeding the village at the end. Kentmere in the lakes had an application in years ago to supply the households at the head of the valley I believe. No idea if it was installed. In these situations I think they're a good idea. A mini, local scheme built to supply several houses.