Abstract: To implement renewable energy resources, microgrid systems have been adopted and developed into the technology of choice to assure mass electrification in the next decade. Microgrid systems have a number of advantages over conventional utility grid systems, however, they face severe instability issues due to the continually increasing constant power loads. To improve the stability of the entire system, the load side compensation technique is chosen because of its robustness and cost effectiveness. In this particular occasion, a sliding mode controller is developed for a microgrid system in the presence of constant power loads to assure a certain control objective of keeping the output voltage constant at 480 V. After that, a robustness analysis of the sliding mode controller against parametric uncertainties was performed and the sliding mode controller’s robustness against parametric uncertainties, frequency variations, and additive white Gaussian noise (AWGN) are presented. Later, the performance of the proportional integral derivative (PID) and sliding mode controller are compared in the case of nonlinearity, parameter uncertainties, and noise rejection to justify the selection of the sliding mode controller over the PID controller. All the necessary calculations are reckoned mathematically and results are verified in a virtual platform such as MATLAB/Simulink with a positive outcome.