In one embodiment, a power processor which operates in three modes: an inverter mode wherein power is delivered from a battery to an AC power grid or load; a battery charger mode wherein the battery is charged by a generator; and a parallel mode wherein the generator supplies power to the AC power grid or load in parallel with the battery. In the parallel mode, the system adapts to arbitrary non-linear loads. The power processor may operate on a per-phase basis wherein the load may be synthetically transferred from one phase to another by way of a bumpless transfer which causes no interruption of power to the load when transferring energy sources. Voltage transients and frequency transients delivered to the load when switching between the generator and battery sources are minimized, thereby providing an uninterruptible power supply. The power processor may be used as part of a hybrid electrical power source system which may contain, in one embodiment, a photovoltaic array, diesel engine, and battery power sources.