The low-SNR capacity of M-ary PSK transmission over both the additive white Gaussian noise (AWGN) and fading channels is analyzed when hard-decision detection is employed at the receiver. Closed-form expressions for the first and second derivatives of the capacity at zero SNR are obtained. The spectral-efficiency/bit-energy tradeoff in the low-SNR regime is analyzed by finding the wideband slope and the bit energy required at zero spectral efficiency. Practical design guidelines are drawn from the information-theoretic analysis. The fading channel analysis is conducted for both coherent and noncoherent cases, and the performance penalty in the low-power regime for not knowing the channel is identified.