This study aims to review previous studies and projects on hydropower generation using irrigation canals in Japan, and discusses their future perspectives. The Japanese agricultural sector uses around two thirds of the total water abstracted, which is channeled through dams, headworks, as well as 40,000 km of canal networks. Although such infrastructure would collectively have significant hydropower generation potential, it has attracted scant attention, due to the relatively low individual potential at each site. To effectively utilize such small and diffuse potentials, we would need to: (1) develop small waterwheels operable with small water heads and low flow rates; (2) develop techniques to identify suitable waterwheel sites within an existing canal system taking channel slopes and sidewall heights and seasonal variations in flow rates into consideration; (3) investigate the possibility of locally utilizing electricity on a micro-scale of a few kW, rather than selling it to the grid; and (4) modify the water management scheme where possible by, for instance, smoothing out flow rates across seasons and thus increasing the cost-effectiveness of power generation.