Distributed generation (DG) in smart grid (SG) is being employed as a means of achieving increased reliability for electrical power systems as regarded by consumers. As the most of DG technologies utilise renewable sources, the power electronic interface plays a vital role to match the characteristics of a DG unit with the grid requirements. This paper presents the power electronics capabilities required for DG systems in SG to convert the generated power into useful power that can be directly interconnected with the utility grid and/or that can be used for consumer applications. Because of the enhancement and the different power ranges of power electronics devices, the development of advanced power electronic interface that is scalable to meet different power requirements, with modular design, lower cost, and improved reliability, will improve the overall performance and durability of smart grid distributed power systems.