In this paper the grid connected PV system is modelled and simulated by using the Fryze conductance based current minimization algorithm. The control algorithm for grid connected PV system is based upon the generation of average active component of current by the calculation of instantaneous average conductance for the load. The dedicated PI controller is used to maintain the dc link voltage. In this paper the control algorithm is implemented to force the source current and supply the average active component of load with the loss compensation current generated by PI controller to maintain the dc link voltage. The power quality improvements have been shown using the simulation results for non-linear load and linear load. The concept behind the current minimization is to supply the average active power of the loads from the source with minimum r.m.s. value of current.