This study presents a susceptance theory-based sliding mode control (STSMC) algorithm for an improved power quality voltage and frequency control of a single-phase microgrid. The proposed microgrid includes a governor-free small hydro turbine-driven single-phase two winding self-excited induction generator (SEIG), a solar PV array and a battery energy storage system (BESS). The non-linear relationship among magnetising reactance, frequency and speed of SEIG along with random fluctuation in active power output of the solar PV array create the major challenge in frequency and voltage control of such renewable energy-based microgrid. The STSMC algorithm is found suitable to control frequency and voltage of such non-linear and complex system. In this proposed control, the system frequency control in dynamics and steady-state conditions and balance of power among various energy sources and BESS are achieved using the sliding mode control. The STSMC eliminates all possibilities of overshoot and undershoot problem in DC-link voltage of the VSC, which in turn reduces the required size of DC-link capacitor and BESS.