This paper reports on the development of a cheap and simple grid connected inverter. It is intended for connection of small photo-voltaic or wind power projects at power level less than 500W to a local grid. This system is ideally suitable for low per capita income countries like Nepal, where widely dispersed renewable sources are not properly utilized yet. The proposed inverter uses the single cycle control technique, which reduces switching complexity and forces the current waveform to match the voltage waveform. The control circuit operation for unity power factor output is explained. The modification of the control circuit for the application of non unity power factor control is proposed and simulated results are presented. The whole method is simulated on PSCAD program for single phase system. Voltage and frequency stability and transients tests are performed and presented on this paper. The short circuit test exhibits that the converter is ideally suitable for small PV. The simulation output exhibits excellent performance with few components, which is not only make it cheap but also reduces the complexity on hardware implementation. At end the simulations will compare with experiments.