A good hydro site depends on the 'head' of water (the vertical drop) and the flow rate. To estimate the energy in a water source, multiply the flow (in litres per second) by the head (in metres) by 10 (acceleration due to gravity). Halve the result, to account for losses and inefficiencies, to get an idea of potential power generation (in watts).
Flow x Head x 10 x 0.5 = Potential power generation in Watts
As this equation makes clear, a greater head will provide more power. Also, as a high head turbine will spin very quickly, there may be no need for complex gearboxes or belts.
Once you've worked out the capacity of the turbine in kW, you'll then need estimates of how often you can run the turbine (e.g. hours per day or per year) to estimate the energy output over time.
For example, a 5kW turbine running continuously for 24 hours will produce: 5kW x 24 hours = 120 kilowatt-hours (kWh).
Most micro-hydro schemes are ‘run-of-river’ - they don’t have a reservoir and only take water from the stream when it is available. You usually need a drop of over 10 metres for a scheme to be viable. High head ‘Pelton’ turbines are comparatively cheap, easy to install and work well in fluctuating flow. Crossflow turbines are more suitable for lower heads. Other turbines are available; their suitability depends on a combination of the available head and flow of water.