In the last decades increasing attention to environmental issues has come to the fore due to the looming issue of climate change. The growing demand for energy, coupled with the increasing greenhouse gas (GHG) emissions, have forced the study and development of energy plants that use renewable energy sources (RES), as electricity generation is one of the major contributors to anthropogenic emissions. Small hydropower plants are of particular interest as their potential is assumed to be high. The aim of this study is to provide a comprehensive assessment of the environmental impacts of small hydropower plants (SHPs) using Life Cycle Assessment (LCA) methodology. The main parameter set for our simplified LCA model was the weight of the components used to construct and operate the plant: concrete, aggregates and steel. Through LCA, air pollutant externalities were associated with the life cycle of SHPs. This was accomplished by applying the NEEDS framework. The results are given per impact type (human health, loss of biodiversity, crop yield, material damage and climate change). The spearhead of the study is that the environmental cost must be a parameter of the total investment cost, which may affect the indexes of the financial evaluation of the project.