Hello Cutter,
He sinks a large pipe into the stream (with a filter over the end to keep fish and dirt out) and then runs that into his hydro-generator down the hill. "The Head" (the height your water will fall to your generator) of such a system is crucial but his needs were small so it did not take an immense amount of water to provide for his needs fully.

Excellent question nonetheless so i am following you now :D