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The necessity to incorporate renewable energy systems into existing electric power grid and need of efficient utilization of electrical energy are growing every day. A shunt connected Voltage Source Inverter(VSI) capable of bidirectional power flow and fast control has become one of the building block to address such requirements. However with growing number of grid connected VSI, new requirements related to harmonic injection, higher overall efficiency and better performances during short term grid disturbances have emerged as challenges. For this purpose a grid connected three phase four wire VSI with LCL filter can be considered as a general module to study different control approaches and system behavior under ideal and non-ideal grid conditions. This work focuses on achieving enhanced performance by analyzing effect of non-ideal conditions on system level and relating it to individual control blocks. In this work a phase locked loop structure has been proposed which is capable of extracting positive sequence fundamental phase information under non-ideal grid conditions. It can also be used in a single phase system without any structural modification. The current control for the three phase four wire VSI system has been implemented using Proportional Resonant (PR) controller in a per phase basis in stationary reference frame. A simplified controller design procedure based on asymptotic representation of the system transfer function is proposed. Using this method expressions for controller gains can be derived. A common mode model of the inverter system has been derived for low frequencies. Using this model a controller is designed to mitigate DC bus imbalance caused by sensor and ADC channel offsets. A multi-rate approach for digital implementation of PR controller with low resource consumption, that is suitable for an FPGA like digital controller ,is proposed. This multi-rate method can maintain resonance frequency accuracy even at low sampling frequency and can easily be frequency adaptive. Anti-wind up methods for PI controller have been studied to find suitable anti-wind up methods for PR controller. The tracking anti-wind up method is shown to be suitable for use with a PR controller. The effectiveness of this method under sudden disconnection and reconnection of VSI from grid is experimentally verified. A resonant integrator based second order filter is shown to be useful for active damping of LCL filter resonance with a wide range of grid inductance variation. The proposed method utilizes the LCL filter capacitor voltage to estimate resonance frequency current. Suitability of fundamental current PR controller for active damping alone, and with the proposed method show the superiority of the proposed method especially for low switching frequencies. Design oriented analysis of the above topics are included in the thesis. The theoretical understandings developed have been verified through experiments in the laboratory and can be readily implemented in industrial power electronic systems.