Power electronics devices hold substantial promise for making distributed energy applications more efficient and cost effective. This project is motivated towards developing and testing inverters that will allow distributed energy systems to provide ancillary services such as voltage and VAR regulation, and increased grid reliability by seamlessly transitioning between grid-tied and stand-alone operation modes. The objectives of this project are to identify system integration and optimization issues and technologies and to provide solutions through research, analysis, and testing of power electronic interfaces for distributed energy applications that are cost-competitive and have substantially faster response times than conventional technologies. In addition, the testing of power electronics interfaces will develop a technical basis for performance assessment for distributed energy systems, subsystems, and components that will finally create a foundation for standardized measurements and test procedures. The ultimate goal for this research is to advance the potential benefits of distributed energy to provide ancillary services, enhance power system reliability, and allow customer choice.