The upsurge seen in integration of sensitive non-linear loads and Photovoltaic (PV) system based power generation has strengthened the demand for enhanced Power Quality (PQ) in distributed power system. Thereby, a Unified Power Quality Conditioner (UPQC), which is a custom power device is proposed in this work for improving the PQ of the overall network. The load side PQ issues is mitigated using the shunt compensator, while the source side PQ issues is mitigated using the series compensator of the UPQC. The active power to the load is provided from the PV system through a shunt compensator. The voltage level of the output obtained from the PV is improved with the aid of Re-lift Luo converter, which is a DC-DC converter of high efficiency and voltage gain. Moreover, in order to provide a stabilized voltage supply to the UPQC, an Adaptive Proportional Integral (PI) controller is selected and its gains are adjusted with the application of Fuzzy Logic Controller (FLC). The Decoupled Double Synchronous Reference Frame (DDSRF) theory is applied to derive the reference voltage and reference current for balancing source voltage variations and load current harmonics, respectively. The series and shunt compensators are controlled using Cascaded Type-2 FLC (CT2FLC). The effectiveness of the proposed PV-UPQC configuration in eliminating load current harmonics and source voltage fluctuations is evaluated on the basis of MATLAB simulations.