Small-scale hydro operators have accused the Welsh Government of abandoning the sector after they withdrew rates support - blaming the impact of Covid on budgets.
Hydro power schemes were threatened with giant rate hikes three years ago when there was a revaluation but a temporary relief grant was introduced for small commercial projects to cap increases in business rates at 10% – or £1,000.
There are over 120 small hydro plants in Wales paying business rates - and around half benefit from the grant scheme.
But Welsh Government has informed the British Hydropower Association it would not renew this from April 1 next year.
Simon Hamlyn, chief executive of the BHA, said: “The Welsh Government has pushed small-scale hydro operators to a cliff edge and now it seems they’re simply abandoning them. The government is seeking to hide behind Covid-19.”
Mr Hamlyn added: “We understand the government’s budget has been affected by Covid.
"We’ve offered a short-term solution which would reduce the annual cost to government by around £140,000.”
Richard Rees runs North Wales Hydro Power, which owns and operates 11 small hydro schemes mostly in Snowdonia National Park.
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He said: “It is extremely disappointing that the government has deserted private hydro operators in Wales who provide much needed renewable energy and rural investment.
"They’ve taken away the short-term solution for a problem which they know exists, without implementing the long-term solution.
“I am especially grateful for the support shown over the last four years by the Welsh Government however I am incredibly frustrated that they have now taken a very short-sighted view in abandoning the sector without delivering on the long-term solution.
"It’s the worst of all worlds, it is ill-conceived, and it is unsustainable for businesses like ours.
“Like any business, we aren’t averse to paying our share of business rates, we just want to pay our fair proportion.”
North Wales Hydro Power say they will suffer a business rates increase of more than 8,000% because of the removal of the grant scheme.
Seven community hydropower schemes currently operating in Wales will continue to receive the grant.
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Aberconwy MS Janet Finch-Saunders, Shadow Minister for Climate Change, Energy and Rural Affairs, said: "This is disappointing on a number of fronts, and Welsh Conservatives condemn this shameful announcement from the Labour administration, which has thrown has thrown an unnecessary spanner into the works, stalling our nation’s efforts to confront global climate change and inevitably leading to hardship for some private operators.
“I have consistently asked the Welsh Government to look at introducing a hydropower development programme which helps landowners to invest in such projects.
"With over 600 watercourses guiding water across Wales, much progress can be achieved through encouraging investment in micro, pico, and small-scale hydro schemes.
“However, instead of doubling down on their support for this mature and proven technology, the Welsh Government have abandoned private hydro operators in Wales, who not only contribute to the production of much needed renewable energy but also inject vital rural investment where it is needed most."
A Welsh Government spokeswoman said: “Over half of Wales electricity needs are now met through renewables, including a 2% contribution from Wales’s 363 hydropower projects.
"We are also 83% of the way towards meeting our local ownership target of 1GW by 2030 – with 825 MW of renewable energy capacity in local ownership.
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“The support scheme we introduced in 2018 has provided more than £1m of support to the sector.
"We have worked closely with the British Hydropower Association to address the impact of the 2017 revaluation of business rates on the sector, and will consider options for longer term support for hydropower and other renewable technologies when the next revaluation takes place.
“The impact of Covid-19 has put unprecedented pressure on budgets and difficult decisions need to be made on where to prioritise future support.
"To date, we have no evidence of hydropower projects ceasing to operate due to unsustainable costs.”