This project proposes a grid integrated hybrid renewable energy sources based system comprising a solar PV array and a wind energy conversion system (WECS). The WECS uses a position sensorless synchronous reluctance generator (SynRG) for the electric power generation from the wind turbine (WT), wherein a sensorless field-oriented control (FOC) is made use of for the maximum power extraction (MPE). A second order flux estimation (SFE) method along with frequency locked loop (FLL) is utilized for the accurate flux estimation from the SynRG stator voltages and currents. A set of back to back connected three phase two leg voltage source converter (VSC) topology is selected for the grid integration of WECS. This system has a common DC-link where the solar PV array and the machine side VSC (MSC) of the wind generator, are directly connected. The power output from the solar PV array and WECS, is shared between the grid and the local loads. The maximum power generation from SynRG in the WECS, is achieved by operating the SynRG at the speed estimated by the MPE algorithm. The maximum power is drawn from the solar PV array by adjusting the DC link voltage, which is decided by the algorithm. For the proper power control and power quality improvement, the grid side converter (GSC) is adequately controlled by implementing an observer based control technique. The real time validation of the system is carried out using a developed laboratory prototype.