Global warming crisis, concern for fuel exhaustion and the interest towards zero carbon footprint all can be only solved by using clean energy production from the renewable energy sources(RESs). Sustainable Development Goals (SDGs) can be achieved by integrating energy from solar, wind turbine, fuel cell and other RESs. AC microgrid enables to connect all these clean energy sources and lowers the number of electricity outages. Microgrid is an effective way to provide energy to the rural areas, as it has lower capital cost and satisfy therequired energy economically. The concern for the safety due to interconnection of conventional grid with the AC microgrid is to be addressed as it is complex to integrate the both. Distributed generation (DG) system alters the fault currentcharacteristics inmicrogrid system such that the conventional means of fault detection might not detect the fault or it might false trip.In order to maintain the robustness and lower the maintenance costs, the microgrid must be monitored accurately to detect faults and isolate them. This paper implements a MATLAB model of Microgrid system with solar, wind and fuel cell along DC/DC boost converter and Inverter. Single-inductor topology for DC/DC converter and inverter using sinusoidal pulse width modulation (SPWM) switching technique has been implemented. Further, the fault detection in the proposed microgridhas been analyzed by using wavelet transform technique. Based on the analysis of fault detection behavior, Discrete wavelet transform (DWT) is identified as an effective technique for various faults in microgrid environment.