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The induction machine operating as a grid-connected generator works under voltage and frequency imposed by that grid, and hence presents itself as an interesting approach to distributed generation systems. However, that is an inherently low power factor operation. The present work investigates that behavior of a 15-kW squirrel cage induction machine operating as a generator on such a system. Its equivalent lumped-parameter circuit is employed by the analysis and is based on actual parameters. As a result, a new formula to compute the capacitance that improves the power factor of that generator is proposed, and the theoretical results of reactive power are compared with experimental results.