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Centralized generation is being supplemented or replaced fast by distributed generation, a new way of thinking about electricity generation, transmission and distribution. Understanding the significance and prospects of self-excited induction generators (SEIGs) in distributed wind power generation (DWPG), this paper firstly presents a comprehensive suitability analysis of commercially available niche copper-rotor induction motor (CRIM) and conventional aluminum-rotor induction motor (ARIM) to be used as induction generators in the above application, through experimental investigations performed on two industrial 7.5 hp CRIM and ARIM. The results of the performance analyses on the two machines provide data for development of a novel control scheme comprising of wavelet transforms and particle swarm optimization technique, proposed next, to alleviate the problem of voltage regulation (VR) associated with the SEIGs. The developed controller for VR is implemented on a low cost embedded system, hence making it economical and flexible for patenting. The developed embedded system is validated initially through an actuator performing mechanical switching of requisite capacitances and finally by integrating it with another actuator, namely, the static synchronous compensator (STATCOM), for efficient voltage regulation. Finally, the tested results are presented.