A low cost, single phase induction generator suitable for use in stand-alone electric power systems is presented. A novel technique is described to actively control the generator voltage by varying the numberof shunt capacitors connected to the generator. Forced commutation of the switching SCR's is not required. Models are derived to analyze the small signal performance of an induction generator. Data from a 4 mW engine-generator set are presented. This paper describes the design of a low-cost, stand-alone engine-generator set. The feasibility of using an induction machine is demonstrated. A novel method of providing excitation current while regulating the generator voltage is described. Models are developed to characterize the performance of the overall system, and data from a 4 kW prototype are presented.