This paper proposes a Virtual Synchronous Generator (VSG) based frequency regulation scheme for an isolated microgrid. The conventional VSG scheme is modified using self frequency recovery control scheme which reduces the frequency deviation occurred in the system due to any power mismatch between the source and the load. The isolated microgrid considered in this paper consists of a solar photo-voltaic (PV) generator connected parallel to HESS with battery and ultra-capacitor. The modified VSG helps voltage source converter (VSC) to mimic the characteristics of a synchronous generator and improves system inertia using hybrid energy storage system (HESS). HESS act as an energy buffer, which ensures faster DC bus voltage regulation. The solar PV generator operates in maximum power point tracking (MPPT) mode using Perturb and Observe (PO) algorithm. The performance of modified VSG controller was tested using MATLAB/Simulink and compared with conventional controllers under different system inertia parameters with a step load change and solar PV output fluctuating conditions.