In order to fully employ the capacity of the PWM rectifier, realise the regulation of reactive power and the stable control of voltage in the grid, a deep analysis of a reactive power compensation capacity tuning method based on PWM rectifier has been presented in this paper. In heavy load situations, the PWM rectifier does not compensate or compensate a small amount of reactive power, reactive power compensation amount is determined by the rated capacity of the PWM rectifier and the DC load power; in light load situations, the PWM rectifier can compensate the whole reactive power in the grid. This paper also analysis the selection method of the DC capacitor parameter in detail. At last，it validates the system through the MATLAB/simulink, simulation results show that the tuning method can realise dynamic reactive power compensation.