Small-scale hydroelectricity (hydel) currently receives worldwide attention as a clean, green, and socially just energy technology. People generally assume that downsizing hydel plants reduces harmful impacts. However, recent debates call for careful circumspection of small hydel’s environmental, social, and economic sustainability, if we are to avoid conflicts, costly setbacks, and hype-disappointment cycles. This paper provides such a circumspect case for the Netherlands, an interesting country thanks to its highly institutionalized water sector. We highlight the importance of studying hydel power as part of a larger, interconnected Large Technical System. For selected cases, we identify what tensions small hydel ‘system builders’ are facing and discuss which strategies they use to address these problems. We distinguish ‘yield to fit in’, ‘confirmative policy focus’, and ‘hydel legitimation’ strategies for the development of small-scale hydropower in the Dutch highly-institutionalized wet network.