This paper presents Matlab simulation the dynamic behavior of small autonomous power system with solar and diesel power sources. The solar power system and the diesel generator operate in parallel. It is more cost effective than a diesel generator acting alone. For the effective integration of the solar power into the power system, a method for controlling the Inverter’s operation is proposed. The power demand from the network is monitored and control signals adjust the angle and magnitude of the Inverter’s voltage. This simulation is to investigate the behavior of the step change in different load. Consequently, develop an advanced digital controller to provide a fast and stable dynamic response of the hybrid power system