In this paper, a capacitor failure at a wind energy electric generation facility is investigated. The probable cause of the capacitor failures is identified to be overvoltage resulting from self-excitation of the induction, generators. Relationships between the voltage escalation and the characteristics of the wind trubines is evaluated. Results of time domain digital simulation are, presented along with a comprehensive explanation for this particular type of self-excitation phenomenon. The nature of the problem indicates that similar events could occur in any windfarm which uses capacitor compensation for the reactive power demand of induction generators. Methods for avoiding occurrence similar to that described in this paper are discussed.