New Mills' Torrs Hydro has been praised by the government.
This year's Renewable Energy Strategy sets out how the country needs to produce 15 per cent of energy from renewable sources by 2010.
It adds that the transformation "cannot be done without individuals, businesses and communities playing a role".
The community-owned hydropower plant on the River Goyt – which provides more than half the electricity for New Mills' Co-operative store – is featured in the report.
Simon Clayton, a director of Torrs Hydro, said: "It's great that the community's achievements have been recognised."
The scheme started supplying power in 2008 via a modern screw turbine installed in a weir built for a Victorian textile mill.
Torrs Hydro will save thousands of tonnes of CO2 emissions compared to coal, oil or gas-fired electricity generation.
* Torrs Hydro is holding open afternoons on July 25, August 30 and September 26. Admission is free.