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The leakage current in grid-interfaced converter systems presents a considerable issue in regards to safety and efficiency. In addition to the high-frequency leakage current caused by the PWM switching schemes, low-frequency leakage current limits the value of dc-side common-mode (CM) capacitors, thereby leading to the bulky dc passive filters for many distributed generation (DG) system applications. In order to reduce the low-frequency dc CM voltage ripple, this paper proposes a PWM modulation scheme and an associated controller for the grid-connected converter based on the North American single-phase (1Φ) system. The modeling, controller design and ac passive filter design are analyzed. Experimental evaluation is provided for the design verification.