Recent developments in renewable energy installations in buildings have highlighted the potential improvement in energy efficiency provided by direct current (DC) distribution over traditional alternating current (AC) distribution. This is explained by the increase in DC load types and energy storage systems such as batteries, while renewable energy sources such as photovoltaics (PVs) produce electricity in DC form. In order to connect a DC distribution system to the alternating current grid (e.g., for backup, delivering energy storage to the grid) there is a need for a bidirectional inverter, which needs to operate over a wide range of source and load conditions and is therefore critical to the overall system performance. However, DC distribution in buildings is relatively new, with much of the research focused on the control of the DC bus connection between sources and loads, rather than on the grid connection. Therefore, this review aims to explore recent developments in bidirectional inverter technologies and the associated challenges imposed on grid-connected DC distribution systems. The focus is on small-scale building applications powered by photovoltaic (PV) installations, which may include energy storage in the form of batteries. An evaluation of existing inverter topologies is presented, focusing on semiconductor technologies, control techniques, and efficiency under variable source and load conditions. Challenges are identified, as are optimal solutions based on available technologies. The work provides a basis for future developments to address current shortcomings so that the full benefits of DC distribution can be achieved.