It is necessary to export some environment variables for a local installation. Here is an example:

export PATH=$HOME/.usr/bin:$PATH
export CPATH=$HOME/.usr/include
export LD_LIBRARY_PATH=$HOME/.usr/lib:$LD_LIBRARY_PATH
export LIBRARY_PATH=$HOME/.usr/lib:$LIBRARY_PATH
export MANPATH=$HOME/.usr/share/man:$MANPATH
export PYTHONPATH=$HOME/.usr/lib/python2.7/site-packages/:$PYTHONPATH

First create all autoconf and automake files with

autoreconf

For local installations to $HOME/.usr use

./configure --prefix=$HOME/.usr

and otherwise simply

./configure

Now the source can be compiled and installed with

make
make install

The configuration file ~/.pwgen.conf has to be installed manually. An example file src/pwgen.conf is available. The file contains a field called seed-init which should be set to a random integer. Passwords are generated using the initial seed and the private password.