This work proposes a microgrid (µ-grid) integrating wind and solar photovoltaic (PV) resources, along with the battery energy storage (BES) to the three-phase grid feeding the nonlinear load. The µ-grid disconcerted by probabilistic nonlinear time dependent parameters and their effects are compensated by cohe- sive controllers used for utility grid side voltage source converter (GVSC) and machine side voltage source converter (MVSC). The switching controls and the reconfigurability of the µ-grid are addressed on imperative aspects of improving power quality (PQ), power reliability, nonlinear load compensation, and economic utilization of resources. The nonlinear load compensation and PQ enhancement are achieved by executing modified version of the adaptive filtering technique including “momentum”-based least mean square (MLMS) control technique, utilized for providing the switching control signals to the GVSC. It utilizes two preceding gradient weights for obtaining updated weight thereby improving the convergence rate and overcoming the limitation of conventional control of the same family. The MVSC acquires its switching sig- nals from conventional vector control scheme and the encoderless estimation of speed and rotor position of the synchronous generator driven by wind turbine through back electromotive force control technique. The external environmental disturbances are overcome by utilizing perturb and observe (P&O) maximum power point (MPP) for wind optimal power extraction and adaptive P&O with variable perturbation step size for solar MPP estimation. Test results are obtained from the laboratory prototype under steady-state and dynamic conditions, including altering wind speed, intermittent solar insolation, and variable load conditions. The PQ issues are addressed and investigated successfully.