Solar PV systems can be used for powering small microgrids in rural area of developing countries. Generally, a solar power microgrid consists of a PV array, an MPPT, a dc-dc converter and an inverter, particularly as the general loads are A.C in nature. In a PV system, reactive current, unbalancing in currents, and harmonics are generated due to the power electronics-based converters as well as nonlinear loads (computers induction motors etc). Thus, estimation of the harmonics levels measured by the Total Harmonic Distortion (THD) is an essential aspect of performance assessment of a solar powered microgrid. A major issue that needs to be examined is the impact of PV system control parameters on the THD. In this paper, we take up this assessment for a small PV based rural microgrid with varying levels of solar irradiance. A Simulink model has been developed for the study from which the THD at equilibrium conditions is estimated. This data is in turn used to design a generalized Linear Regression Model, which can be used to observe the sensitivity of three control variables on the magnitude of the THD. These variables are: Solar Irradiance levels, Power Factor (PF) of connected load magnitude of the connected load (in kVA) The results obtained show that the greatest sensitivity is obtained for load kVA variation.