The targeted and current development of wind energy in various countries around the world reveals that wind power is the fastest growing power generation technology. Squirrel cage induction generator has been widely used in the wind power industry. However, with the increment in penetration of these turbines, power system will experience a change in dynamics and operational characteristics. Given this assertion, the present paper holds a research on the small signal stability analysis of SCIG based wind farm interconnected system. Reactive power compensation equipment SVC is introduced to enhance wind farm voltage stability. Eigenvalue analysis of three different scenarios is performed to give an intuitive understanding of the wind machine features. The results indicate that damping performance is detrimental and beneficial under different circumstance, which is different with synchronous machines. The SVC equipped case manifest dynamic reactive power compensation contributes much to the voltage stability. Time domain simulation conducted at the last part effectively verified the conclusion received from frequency domain.