This paper describes a load simulator with power-recovery capability, which is based on the voltage source converter-inverter set. The load simulator described in this paper can save the electric energy that should be consumed to test the operation and performance of the distributed generation system and the power quality compensator. The load simulator consists of a converter-inverter set with a DSP controller for system control and PWM pulse generation. The converter operates as a universal load to model the linear load and the non-linear load, while the inverter feed the energy back to the power source with harmonic compensation. The load simulator can be widely used in the lab to test the performance of the distributed generation system and the power quality compensator.