As mentioned above, mounting a light at axle height is not ideal but I did that on my errand bike. I was not planning to put a dynohub wheel on that bike since I rarely ride it after dark, but I got a fantastic deal from a dealer on a new wheel that was pulled off of another bike. And I had a vintage dyno powered light in storage, so I upgraded the bike to dyno headlamp. The light is mounted on a piece of threaded rod in the fender mount on the fork dropout.
