In this paper, the hybrid photovoltaic-thermoelectric generator (PV-TEG) combined dynamic voltage restorer (DVR) system is proposed for the power quality disturbances compensation in a single-phase distribution system. The stable and precise level of input voltage is essential for the smooth and trouble-free operation of the electrically sensitive loads which are connected at the utility side to avoid system malfunctions. In this context, the hybrid PV-TEG energy module combined DVR system is proposed in this paper. With the support of the hybrid energy module, the DVR will perform the power quality disturbances compensation effectively with needed voltage and /or power. In the proposed system, the PV and TEG energy sources are connected electrically in series to produce adequate voltage for the DVR operation and the fractional factor-based variable incremental conduction (FFVINC) maximum power point tracking (MPPT) control algorithm is employed to extract the possible maximum power from the PV array. The intelligent fuzzy logic controller (FLC) is chosen for implementing the MPPT control algorithm. The half-bridge voltage source inverter (VSI) circuit and in-phase voltage compensation technique are used in the DVR for better power quality disturbances compensation. The performance and usefulness of the proposed DVR system are investigated by an extensive simulation study with four different modes of operation, the study results are confirmed that the proposed system promptly identifies the power quality disturbances for compensation. Moreover, the investigation proved that the combined PV and TEG energy module can provide better energy efficiency in converting solar irradiation into electricity.