The Storr Lochs scheme was a child of Tom Johnston, the Labour politician who served as Secretary of State for Scotland in Winston Churchill's wartime coalition. Johnston was a Highlands man by instinct and a pragmatist by training. He believed that the empty glens north of the Highland Line could be brought into the twentieth century if the state owned the rivers. In 1943 he pushed through the Hydro-electric Development (Scotland) Act, which created the North of Scotland Hydro-Electric Board. The Board would build hydro stations across the north of Scotland and sell the bulk power south to subsidise low electricity rates for remote, sparsely populated communities that no private company would ever connect. Profits would fund "the economic development and social improvement of the North of Scotland." By the time Storr Lochs was approved in 1947, Johnston had left politics and become the Board's chairman. He was now in charge of executing the policy he had written.

The engineering problem at Storr was straightforward to state and difficult to solve. Loch Leathan and Loch Fada lay on the high ground between the road from Portree to Staffin and the sea. The best site for a turbine house was directly below them, on the shore at Bearreraig Bay. Between the two was a 350-foot basalt cliff. The Board had initially hoped to land materials by landing craft on the beach. After fierce tides took one vessel and all the equipment it was carrying to the bottom, that plan was abandoned. They built a funicular instead. The railway is standard gauge, with a maximum gradient of one in two and a single carriage controlled by an electric winch at the top. Alongside the rails are 647 concrete steps for anyone who prefers to walk. The turbine house at the foot was clad in local stone with a slate roof, deliberately built to disappear into the cliff. From the sea it looks like nothing so much as a sturdy croft cottage.

Construction began in early 1950. A dam was built across the Bearreraig River to raise Loch Leathan, with a long wing wall threading the boggy hillside for stability. A single pipeline ran down to two 1 MW Francis turbines - enough capacity to supply the whole island. The opening on 31 May 1952 was a small grand occasion. Lady Rachel Stuart, wife of the new Secretary of State for Scotland, started the turbines. Tom Johnston gave a speech in which he answered critics who had argued that electricity was unnecessary in the Highlands because Highlanders were perfectly satisfied with their oil lamps: 850 houses on Skye were already connected, he said, and the total would rise to 2,500 in the next year. The scheme had cost £247,000. The population of Skye at the time was 10,500. A third 1 MW generator was added in 1956 and a second pipeline laid. Loch Fada was later connected to Loch Leathan by a channel that let its 82 acres top up the reservoir in dry months.

By the 2010s the Storr Lochs scheme was getting old. The Francis turbines were the originals from 1952. Adjustments required a human being on site, and the funicular still needed to bring people down to the turbine house for routine work. Scottish and Southern Energy, which had inherited the scheme at privatisation, decided in the mid-2010s on a complete refit. The new turbines, supplied by Voith, included automatic guide-vane adjustment driven by an autonomous hydraulic control unit - the first time the system had been used in a small hydro station. Most testing happened off-site. Removing the original turbines posed its own problem: how do you extract massive concrete and steel from a turbine house only accessible by a funicular? Site Drilling Specialists used a diamond wire saw to cut the foundations into blocks small enough for the railway to carry up. By the end of 2017 the station was new again, controlled from SSE's main centre at Perth via telemetry links between the turbine house, the winch house and the valve house. The cottage on the cliff looks just the same.