[3] Vadfoss historically had a train station along the now defunct Kragerø Line that primarily transported lumber and passengers.

Elements of the rail line still remain however, including the bridge across the river and the original station building from 1927, which is now used as a visitor center and bus depot.

Though many people live in Vadfoss, the nearby river and the dam in the north of the village have made it a popular area for industry.

The hydroelectric plant uses two Francis turbines to convert a 13 m (43 ft) water drop into 15 gigawatt-hours (54,000 gigajoules) of power annually.

The five plants on the Kragerø River combined with the two others on Suvdøla in Drangedal produce an average of 123 GWh (440,000 GJ) of electricity per year.