This paper presents the investigations on the power quality issues of a renewable energy based micro grid conversion system with Modular Multilevel Converter (MMC). DC micro grid is formed by considering the renewable energy generation from solar. The output of the renewable energy micro grid conversion system is analysed for power quality issues. A comparative analysis is made for the DC micro grid conversion system with conventional multilevel inverter and modular multilevel inverter with controller. The current controller, active power and reactive power controllers are developed based on Phase Disposition PWM method. The simulation is carried out for the same micro grid system with multi level inverter, modular multilevel inverter with controller using MATLAB Simulink. The investigations based on the simulation are discussed in this paper.