This paper presents state space model of single-phase STATCOM based on continues switching function. Continues switching functions for bipolar voltage source inverter (VSI) have been used to derive the transfer function for complete controller. Two proportional integral (PI) controllers which are a DC PI for DC link voltage control and an AC PI for alternating current control are implemented in cascade topology in reactive power compensation. Proposed control method has been analyzed in simulation by using MATLAB. Root locus technique is used to design AC PI controller parameters.