The advent of multilevel inverter topologies paves path for the realization of renewable energy based microgrids for various classes of consumers. But, these topologies are offering concerns with design complexity, power quality, dv/dt stresses, capacitor voltage balancing, etc. In view of these challenges, this paper proposes a simple Modular Cascaded Multilevel Inverter with modified Uni-Polar Shifted Carrier Pulse Width Modulation (MCMI-mUPSC PWM) topology for microgrids. The proposed MCMI topology eliminates the use of clamping diodes, capacitors, and requires only 1/4th (25%) of the DC input voltage that is used in any conventional topology to produce the same amount of output voltage. This leads to the reduction in switching devices’ rating and dv/dt stresses. The proposed mUPSC PWM reduces the magnitude of hazardous lower order harmonics by shifting them to higher order components around the region of integral multiples of switching frequency. Thus, the proposed MCMI-mUPSC PWM topology simplifies the design of multilevel inverters along with aforesaid advantages. For the analysis, microgrid modelling and simulations are carried out in MATLAB/Simulink®. The effectiveness of the proposed topology is evaluated by calculating various power quality indices under dynamic and non-linear loading conditions. These indices are compared with the conventional topology with respect to standard tolerances. From results, it is observed that the proposed topology has improved the power quality along with the elimination of some of the inherent problems of the multilevel inverters. This enhances the plausibility of microgrid installations towards smart and net-zero energy buildings. © 2016 Elsevier B.V.