Aiming at serious harm caused by reactive power of power grid, the reason why SVG can compensate the reactive power is analyzed. Direct current control based on the detection method of source current is selected. SVG with resistive inductive load is simulated by Simplorer. Operational performance is analyzed in detail. The simulation result verifies that if SVG and power grid are connected in parallel and the appropriate algorithm is adopted, there is only active power in power grid. SVG can provide needed reactive current of working load. Compensation time can change by alternating the certain system parameters. The result further supports the feasibility and efficiency of this control method.