The paper presents a fuzzy step size least mean square (FSS-LMS) algorithm designed to improve power quality in grid-connected renewable energy systems by mitigating harmonics and neutral current compensation. It details the system's capability to maintain balanced currents and unity power factor at the point of common coupling despite the presence of unbalanced nonlinear loads. The simulation results indicate that the proposed control strategy efficiently compensates load current harmonics and supports smooth power flow from renewable sources.