The 7,340 sq ft food shop in New Mills, Derbyshire, uses electricity generated by the River Goyt.
Over the next year a community-owned micro-hydro installation is expected to produce 240,000 kwh of electricity a year - enough to provide over half the store's electricity needs.
Water Power Enterprises approached New Mills with the idea for a small-scale hydro-plant and managed its installation.
"Seeing the UK's first community-owned hydro installation generate electricity is superb. The electricity is powering a store that lies at the heart of the community," said Water Power Enterprises MD Steve Welsh.
The green electricity project is owned and funded by local people through a share scheme that was financed by a grant from The Co-operative Fund. This has led to them forming an industrial and provident society for the benefit of the community.
Paul Monaghan, head of social goals and sustainability at The Co-operative Group, said it was planning to extend support to further micro-hydro schemes across the country.