Here a P-Q algorithm for shunt active power filters under stiff and non stiff source is described. The conventional current reference algorithms suffer from the disadvantage that it is not possible for harmonic compensation when the supply is unbalanced. A ramp comparison method is incorporated in this method to avoid the disadvantages caused by the conventional hysteresis control method. A comparison of different current reference generation algorithms is also done. The simulation works has been done in MATLAB/SIMULINK software.