The paper addresses several constraints associated with wide scale deployment of grid integrated renewable energy system such as stability, active and reactive power regulation, LVRT (Low Voltage Ride Through), power factor improvement and demand side management. While highlighting its challenges, potential solutions to the problems are also discussed using different FACTS (Flexible AC Transmission system) family devices and PHEV (Plugin Hybrid Electric Vehicles). Finally a typical power system is modeled on Matlab-Simulink showing a voltage compensation system of a power system using SVC and the grid integration with active and reactive power control using PHEV.