This paper presents a novel approach for power generation from rotating machines in textile mills using externally coupled repulsive magnets and a new stepped DC coupled Quasi Z-inverter. Power is obtained as a byproduct of the effective harnessing of rotational energy with the use of repulsive magnets. This derived power is stored in a battery arrangement and is retrieved, buck/boosted, and converted to multilevel AC voltage with the new stepped DC coupled quasi Z-inverter. The proposed inverter is powered by isolated voltage sources, uses fewer switches, and produces less distortion in the resulting multilevel voltage compared to its counterpart, and thus reduces the filter requirements.The derived AC power from the system can be used for light-load applications in textile mills, thus compensating for the energy demands. Simulation of the entire proposed setup is performed in MATLAB/Simulink and the results are presented. The repulsive force produced by the magnets is assessed with K & J Magnet software. To validate the simulation, experimentation is done using rotating machines available in the laboratory. The prototype model of the stepped DC coupled quasi Z-inverter is used to study the performance of the system and the results are evaluated. The optimum modulation index is identified for different numbers of sources at the input.