Abstract: More than ten years, small hydropower development in Yunnan province still has been facing many difficulties, some projects has been operated less-than-desirable.With the purpose to identify the decisive factors which influence the economic benefits of small hydropower stations, we analyzed the crux of the current small hydropower operation difficulties, and carried out an objective development opportunities research. With the examples of real projects, this paper on the one hand, started with the operation and financial data, excavated and analyzed internal and external factors that affecting the project, so that to put forward the short-term trend;On the other hand, combined with the current construction environment and external policies, the paper analyzed several key factors that would decide small hydropower projects, comprehensived and objectived opportunities and threats. This work provides some guidance for small hydropower projects investment in the future.