The traditional configurations of power systems are changing due to the greater penetration of renewable energy sources (solar and wind), resulting in reliability issues. At present, the most severe power quality problems in distribution systems are current harmonics, reactive power demands, and the islanding of renewables caused by severe voltage variations (voltage sag and swell). Current harmonics and voltage sag strongly affect the performance of renewable-based power systems. Various conventional methods (passive filters, capacitor bank, and UPS) are not able to mitigate harmonics and voltage sag completely. Based on several studies, custom power devices can mitigate harmonics completely and slightly mitigate voltage sags with reactive power supplies. To ensure the generating units remain grid-connected during voltage sags and to improve system operation during abnormal conditions, efficient and reliable utilization of PV solar farm inverter as STATCOMs is needed. This paper elaborates the dynamic performance of a VSC-based PV-STATCOM for power quality enhancement in a grid integrated system and low voltage ride through (LVRT) capability. LVRT requirements suggest that the injection of real and reactive power supports grid voltage during abnormal grid conditions. The proposed strategy was demonstrated with MATLAB simulations. © 2018 by the authors. Licensee MDPI, Basel, Switzerland.