2. You need a large decent in elevation to build one. I'm not sure on the exact height but I think it's close to 100' of drop.
3. Basically all the suitable locations for a hydroelectric dam in the US are already being used. Because you need so much height to generate the electricity there just aren't that many suitable locations to use.
4. It disrupts animal life. There are many species of fish that are going or already are extinct because of human dam creation. Salmon, for example, can no longer swim upstream to spawn because of the structures. Thankfully people are realizing this and building alternatives for them like water stairs and bypass tubes that allow the fish to swim around or through the dam without injury.
As an energy source it is great. Clean and reliable.
Hydroelectricity is a process of generating electricity from water. The process produces no smoke, ashes or radiation. However, the utilizing water resources for electricity production can effect fishes dwelling in the water resources. The interrupted water flow can affect the natural habitat of the fishes.
Here are your cons:
1. High initial capital investment.
2. Relocation of people near plant site.
3. Destruction/modification of river's ecosystem.
4. Plants are generally far away from cities. This means additional transmission costs.
5. Most of the plans can work at their full potential only for short duration during rainy season. Only very big projects are provided with catchment area
Good things about it: It is a renewable energy source, it is reliable, it is virtually free after you build a dam (except for the upkeep of the dam), it generates huge amounts of power, it can be used for flood control, and it creates jobs for people.
Bad things about it: (These things apply to dams with reservoirs, not run-of-the-river dams) The reservoirs displace people and the dams hold back nutrient-rich sediment that would fertilize areas further downstream.
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To respond to Pete above, that is not true at all, sure for large-scale projects you might need a larger amount, and there is a limited amount of that, but micro-generation? Isn't even close to being tapped.