The main aim of this project is multilevel inverter associated UPQC for power quality enhancement. UPQC having 2 controllers namely series controller&another one is shunt controller. These controllers are associated with the DC link capacitor. Dc voltage is produced by PV source. In this project multilevel inverters are used in series&shunt controller for producing accurate sinusoidal wave shape. The series controller is connected at grid side for grid power quality improvement. In this project grid side voltage sag/swell reduced by series controller. The shunt controller regulate the reactive power compensation as well as reduced the load current harmonics. These controllers are regulated by expending synchronous reference frame theory (SRF). The advantages of proposed system is high efficiency&enrichment of quality power. The simulated results of proposed system is verified by MATLAB/Simulink environment.