Hybrid renewable energy is an emerging notable choice in microgrids' formation to overcome the problem of intermittency that is usually raised while using a single renewable energy source. Generally, the hybrid renewable energy source produce DC power, which is to be converted to AC power to supply to loads and integrating with utility grid. Hence, the efficacy of a microgrid relies on its DC/AC power conversion. For DC/AC conversion, the contemporary research work focuses on the design of power electronics based static multilevel inverter configurations and the traditional electrical machines based retrofitted configurations. However, all these static and rotary inverter configurations possess their inherent limitations, which affect the fruitful operation of the microgrid. Keeping this conviction in mind, this paper analyzes the effect of static and rotary inverters on the microgrid operation. For the analysis, total system's modeling and simulations are performed using MATLAB/Simulink® tool. Various performance indices are obtained for the considered static/rotary inverters and presented a comprehensive analysis as a result. © 2016 IEEE.