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The trend toward using inverters in distributed generation systems and micro-grids has raised the importance of achieving low-distortion, high-quality power export from inverters. Both switching frequency effects and pre-existing grid voltage distortion can contribute to poor power quality. A well designed filter can attenuate switching frequency components but has an impact on the control bandwidth and the impedance presented to grid distortion. This paper describes a filter designed to incorporate an isolating transformer and the design of a complementary controller that rejects grid disturbance, maintains good waveform quality and achieves real and reactive power control. A realistic discrete time implementation is discussed and validated with experimental results.