A definition, to help you get started:
"Wild AC" refers to any alternating current that is not REGULATED in some way. You're first guess about the wave form not being a perfect sine is one case, but there are other reasons, too. Either in voltage, or frequency, or both... what we are referring to is the variable nature of any of these variables. The AC from the utility is anything but wild: frequency managed down to +/- 1% and voltage clamped to +/- 15% and anything beyond that can cause a disconnect from the system. And it's a very pure sine too. When you run a variable-speed generator (wind/hydro) then the output frequency is variable, the voltage tends to ramp up with the speed, and when connecting through rectifiers the waveform gets blocky. Hence we call it "wild AC" and it has to be treated appropriately.
Getting back to grid-tie... clearly now the output of any generator, if it is to be tied to the grid, must be fixed in speed, and must accept that its operating voltage be clamped, too - and be able to produce useful amounts of electricity under those conditions. You have just made a constraint that is much harder to make compatible with the variable water flow of 3-13 MPH.
And some economics:
To make a buck on grid-tie, you have to get your investment back from the utility. Spending 8k$ to get a 0.95$ bonus on my bill is not going to get me started. So let's scale your dream system, if we can: Start with the assumption that you pay 0.10$ per kWhr of electricity you buy from the utility, and that they are ALSO going to pay you 0.10$ for every kWhr you generate and sell back. Two SEPARATE assumptions that are NOT TRUE in many jurisdictions that I can name because I live in one of them! Note that your utility may also be charging you additional fees per kWhr for other things like administration, distribution, and system upgrades, which on my bill are GREATER than the cost of electricity itself. Also assume that your utility will charge you (I said CHARGE YOU) 25 dollars per month for the PRIVILEGE of selling them your electricity. You know where this is headed already, right? Next, we also assume you have a typical north american home, which is at least 10 MWhr per year. You sign a contract with the utility that allows you to sell back to the grid your generation, up to the quantity that you consume. They probably won't reimburse you for any production over your actual consumption, but that also varies in some jurisdictions. Let's say you invest 10,000$ on a 10 kW PV array for your house, which will produce about 10 MWhr where you live. You think this is balanced. Now the awful math:
Consumption: 10,000 kWhr * 0.10$ / kWhr = 1000$ per year
Admin fees: 10,000 kWhr * 0.15$ / kWhr = 1500$ per year
Tie-In Fees: 25$ / month * 12 months = 300$ per year
Production: 10,000 kWhr * 0.10$ / kWhr = 1000$ per year rebate
So you're still paying 1800$ per year instead of 2800$ per year. And if you had an exceptionally sunny year, you don't get any rebate for the extra production because it's capped at equal to your consumption anyway. You will not get your 10k$ back if your utility company plays by these rules. You have to find out for yourself if that's the case where you live.
There ARE jurisdictions that gave you a break, or give you a better price for PV electricity than the going rate for the utility's electricity, and that makes a big difference if you can get it (ask DamonHD). However, many of those states/provinces are getting hammered politically and the gravy is about to dry up.