The challenges from intermittent solar generation are twofold: system stability and power quality. System stability depends on solar penetration level, fault ride through ability, and reactive power support, for which an average model or controllable voltage source representation can be utilized. Power quality is more about consumer-driven issues and dynamic performance, for which a detailed model is needed. This paper analyzes the power quality issues of voltage flicker, harmonics and transient voltage variation for a three phase photovoltaic (PV) system. Control strategies are proposed for STATCOM to mitigate issues of power quality, and tested in a grid-connected PV system using PSCAD/ EMTDC software. Simulation results show the effectiveness of the proposed strategies.