The transition to sustainable energy sources is critical in addressing global environmental challenges and meeting the increasing energy demands. Small hydro power plants (SHPs) have emerged as a viable solution due to their minimal environmental impact, scalability, and potential for local energy independence. This paper provides a comprehensive analysis of the costs associated with developing and operating a small hydro power plant. Through a detailed examination of capital expenditures, including site assessment, civil works, and equipment procurement, as well as operational costs such as maintenance and regulatory compliance, this study offers a thorough cost estimation model for SHPs. The findings highlight the significance of accurate cost estimation in the planning and implementation phases, which is crucial for investors and policymakers to make informed decisions. Moreover, the paper underscores the economic viability of SHPs in comparison to other renewable energy sources, thereby advocating for their broader adoption. Ultimately, this research contributes to the strategic development of renewable energy infrastructure, emphasizing the importance of cost-effective and reliable energy solutions for sustainable development.