Abstract With the changing nature of electrical systems from conventional electrical systems to smart electrical systems, several aspects should be considered and adapted with the new conditions. One of the most important characteristics of electrical systems is the power quality concept. There has been much effort on designing devices to improve power quality, but due to changes in the nature of loads, new challenges that modern devices bring to electrical systems, increasing awareness of customers and cost of power quality improvement (PQI) devices, there should be a revision on the power quality aspects of future smart electrical systems. This would include implementation of new tools, taking into account the new challenges and deployment of new energy sources. In this chapter a brief history of PQI devices has been presented apart from introducing the new tools and challenges of smart grids; thereafter much focus is dedicated to the “transition conditions of power quality issue” as a bridge to progress to the new generation of PQI devices.