This paper investigates the effect of Static VAR Compensator (SVC) on power system load shedding. SVC is mainly used in power system stability improvement. This paper proposes a new use of SVC to reduce load shedding. An algorithm of Newton Raphson method (NR) to reduce the load shedding for installing SVC in the system is proposed in this paper. 5 bus test system example is used to demonstrate the effect on load shedding. The test results show that the effect of SVC is significant, in this Static VAR compensator (SVC) is incorporated in Newton Raphson method in which Power Flow Solution is a solution of the network under steady state conditions subjected to certain constraints under which the system operates. The power flow solution gives the nodal voltages and phase angles given a set of power injections at buses and specified voltages at a few, the model of SVC i.e. SVC Susceptance model is discussed. It is also shown that the power system losses are decreased after incorporating the SVC in this N-R method. The results are generated for 5-Bus system. By incorporating the SVC the amount of load shedding is reduced to get the voltages in their limits.