The invention provides an energy-saving system of a unified power quality conditioner (UPQC) and a controlling method thereof. During normal running, an anti-parallel thyristor is triggered and conducted; a series isolation transformer and a series current converter are in a bypass state; and a load current flows through the anti-parallel thyristor and a trigger pulse of the series current converter is blocked. When a voltage swelling or voltage dip phenomenon at a system side is detected, the anti-parallel thyristor is turned off by a forced way within short time, the load current flows through the primary side of the series isolation transformer, and the series current converter carries out compensation on the voltage swelling or voltage dip of the system side, so that the voltage of the load side goes back to normal. When the voltage of the system side goes back to normal, a trigger pulse is sent to the anti-parallel thyristor, so that the anti-parallel thyristor is conducted; and then the series isolation transformer and the series current converter are in a bypass state. Therefore, power losses of the series isolation transformer and the series current converter can be reduced, thereby realizing the energy conservation effect; and meanwhile, the compensation response time of the series portion of the UPQC is not influenced basically by controlling on and off of the thyristor in a forced mode.