This paper presents an outer-rotor type permanent magnet reluctance generator (PMRG) for a small-scale wind-turbine and micro-hydroelectric power generation. First, this paper describes a PMRG using ferrite magnets. Residual magnetic flux density of the ferrite magnet is about three times lower than the rare-earth magnet, but the cost is about 10 times lower. It is demonstrated that the proposed PMRG with ferrite magnets has almost the same output power as that using rare-earth magnets by employing an outer-rotor structure. Next, a method for reducing torque ripple of the PMRG by stacking two rotors is proposed. One rotor is shifted by 180° in electrical angle from the other rotor. In addition, the rotor pole-tips are chamfered so that the toque waveform consists of only odd harmonics. In such a structure, the torque ripple can be almost cancelled. A trial two-stacked outer-rotor PMRG demonstrates that the maximum output power is 777 W, the efficiency at the point is 84.5%, and torque ripple is very low.