Hydro heat systems are not going to work for everyone, but for those with the right natural conditions, they are a fantastic source of free heating and electricity.
So what are the right natural conditions? Ideally you need a lot of water coming from a great height, not too far from your home. All the old cottage industries that grew up around falling water so they could run automatic milling machines had the right idea.
The amount of electricity, and therefore heat, that you can generate depends on two things - the rate of water fall and the height it falls from. Higher is usually better for hydro heating - a twenty gallon per minute water source falling one hundred feet gives the same output at a 100 gallon per minute source that only drops twenty. The lower drop (the height is called the head of water) will need you to invest in much wider diameter piping, and this ratchets up the cost.
If you decide on a hydro heat generating system you can choose to interconnect with the utility supplier (if you are on the grid). This means you will not be left without hot water when your waterfall runs dry, and any excess electricity that you do not use can be sold back to the electricity company, which also reduces your utility bill.