The problem is that it's monumentally expensive. You will need to have a pretty big water tower to handle enough energy to run a microwave for a hour.
P.E. = mg(h)
So say we have 2,000 liters of water that is 50 meters high.
2000kg * 9.81m/s^2 * 50 * 80% efficiency = 784,800.0 joules.
Say you have a 1100 watt microwave. A watt is 1 joule per second. That gives you enough energy to run that microwave for about 11 minutes.
A better example would be existing municipal water towers. A 500,000 gallon water tower that is 129 feet tall costs about 2 million dollars. This is based on a public notice I found for a city in the USA.
That is 1892700 liters and 39 meters. I am guessing that the average height the water actually falls is 25 meters.
The average American household uses about 30Kwh per day. Which is 108,000,000 joules.
1892700 * 9.81 * 25 * .80 / 108,000,000 = 3.4
So 2 million dollars for 3.5 households-days worth of energy.
I don't know if having 1 days worth of energy is too much or too little per household.
And beyond the cost of the tower itself you need the generators and lines and holding pond for the water. Or underground tank or whatever you want to use.
It's very expensive.
However it is probably the cheapest option right now as far as current technology goes.
It would probably be cost effective for a off-grid shack in the woods, though.