Abstract: In this paper solar photovoltaic system connected to the utility grid is design and simulated. The utility grid and SPV system are coupled with current controlled voltage source (VSC) and LCL filter. LCL improves stability of the system .The system is controlled through power balance theory method. For grid synchronization and power control, control algorithm is required also requires power conditioning unit for smooth operation, Power balance theory (PBT) is used as control strategy. PBT is simple and can be achieved easily. The grid connected pv system consist of – Photovoltaic (PV), Incremental Conductance MPPT method, LCL filter, three phase utility grid, power balance theory. Source/grid voltages are used as reference for generating templates. This is the principle behind the algorithm implementation. In order to generate templates mathematical equations are required. Incremental conductance method is used for simplifying the implementation of the system the grid connected Photovoltaic system (PV) is connected to a non linear load having intermittent components as dc/dc. This system is capable of eliminating harmonics and compensating the reactive power.SPV array using indirect current control scheme. MATLAB/SIMULINK is used for demonstrate the system.