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This paper presented a grid-connected inverter incorporating multiple technical concepts like “single-stage”, “multilevel” and “transformerless”, and thus attracting in cost and efficiency. Also energy storage (ES) was integrated to assist extensive power regulation. A complete control scheme was developed to achieve wide range real/reactive power management involving pure real power, pure reactive power and the adjustable mix of both. To solve the key issue of internal power coordination, a reactive power allocation (RPA) strategy was proposed to dispatch power flow under wide variations. Phasor analysis was introduced to clarify RPA principle. Voltage boost capability answering grid-side power demand was analyzed. Constraint condition fulfilling effective RPA was derived. Being crucial to a workable RPA, the selection of reactive power allocation coefficient (RPAC) was investigated under the widespread power operation region. Simulation results were presented to verify proposed technology. And a 3.5KW test bed is ongoing for experimental validation soon.