AbstractDistribution static compensator is based on power electronic devices technology which is utilized to supply rapid changes in active power as well as reactive power of utility grids. This is useful to achieve corrections in power factor, balancing of load, compensation of current and filtering of harmonics. Therefore, proposed work investigates the improvement of the power quality by utilizing the distribution static compensator, which is equipped by battery energy storage system and interfaced to distribution network with solar photo voltaic (PV) energy integration. In the present study, distribution static compensator is controlled using a control strategy based on the synchronous reference frame theory. Customised IEEE‐13 nodes test system incorporating solar PV generation and distribution static compensator, is utilized to perform the harmonic mitigation and power quality analysis. Disturbances of power quality and harmonics have been investigated due to abrupt changes in the insolation of solar radiation, outage of PV plant from grid and synchronization of PV plant to grid. MATLAB/Simulink environment is utilized to perform the study. Effectiveness of a developed approach is validated by comparing results of simulation with results extracted in real time using real time digital simulator. Results indicate that the developed method is more effective for harmonic mitigation and improving power quality of electrical power in distribution network integrated with solar PV generation. Performance of the approach is compared with the performance of methods reported in the literature to establish the suitability of the method for harmonics mitigation and power quality improvement in grid with solar energy.