The objective of the harnessing of such non-conventional energy sources could be achieved in a big way by the development of the suitable low cost generating systems. The self excited induction generator (SEIG) is a suitable power generation source utilizing renewable energy sources due to its advantages as compared to conventional synchronous generator. SEIG can generate single phase and three phase power using three phase induction motor. The SEIG has a major drawback of poor voltage regulation. For this purpose, a suitable control scheme is to be developed such that the load on the SEIG remains constant despite the change in the consumer load. One way to regulate the voltage and frequency of the SEIG is to maintain a constant load at its terminals. Also, such control scheme should be simple, economical, rugged and reliable. The use of DSP gives cost effective solution with least hardware complexity. The performance of SEIG can be further improved with STACOM based controller for reactive power compensation or voltage source converter with bidirectional active and reactive power flow capability.