Supplying power to remote areas may be a challenge, even for those communities already connected to the main grid. Power is often transmitted from long distances, under adverse weather conditions, and with aged equipment. As a rule, modernizing grid infrastructure in such areas to make it more resilient faces certain financial limitations. Local distribution may face stability issues and disruptions through the year and—equally important—it cannot absorb significant amounts of locally-produced power. The European policy has underlined the importance of energy production in local level towards meeting energy security and climate targets. However, the current status of these areas makes the utilization of the local potential prohibitive. This study builds on the observation that in the vicinity of such mountainous areas, irrigation dams often cover different non energy-related needs (e.g., irrigation, drinking water). Transforming these dams to small-scale hydropower (SHP) facilities can have a twofold effect: it can enhance the local energy portfolio with a renewable energy source that can be regulated and managed. Moreover, hydropower can provide additional flexibility to the local system and through reservoir operation to allow the connection of additional solar photovoltaic capacities. The developed methodological approach was tested in remote communities of mountainous Greece, where an earth-fill dam provides irrigation water. The results show a significant increase of renewables’ penetration and enhanced communities’ electricity autarky.