This paper presents an analysis for penstock optimization, for low head microhydro schemes. The intent of the optimization is to minimize capital cost per kilowatt rather than maximize the energy from the site. It is shown that site slope is an important consideration that affects the economics. While this work stands alone it has been generated as part of a research program that is in the final stages of developing a modular set of cost-effective low-head microhydro schemes for site heads below those currently serviced by Pelton Wheels. The rationale for the work has been that there is a multitude of viable low-head sites in isolated areas where microhydro is a realistic energy option, and where conventional economics are not appropriate. This is especially the case in third world countries. The goals of this paper have been to illustrate the issues and show how to decide on the most cost-effective penstock solutions that systematically cover the 0.2-20 kW supply. The paper presents the results as a matrix of the most cost-effective penstocks, and in the larger project it matches them to a modular set of turbines. It shows how to find the relative cost-effectiveness of alternative penstocks, and concludes with examples illustrating the results. (C) 2007 Elsevier Ltd. All rights reserved.