Recently hierarchical control of microgrid has been the focus of extensive research due to its flexibility to effectively utilize the micro-sources while ensuring reliability. The work presented in this paper is focused on the design and development of a photovoltaic (PV) power conditioning system for a hierarchically controlled microgrid application. The PV interface is equipped with multiple functionalities such as droop characteristic control for both active and reactive power sharing, centralized power sharing, adaptive power control etc. All these features make the PV interface one of the main power contributing sources. A detailed control design procedure for this microgrid PV source is given. The effectiveness of the proposed control scheme is investigated with a laboratory prototype of the microgrid with hierarchical control supported by sources like Solar PV, Wind, hydro turbine driven synchronous machine and Fuel cell based renewable energy sources. The microgrid has the capability of reconfigurable control. The Local Source Controllers (LSC) are linked with Controller Area Network (CAN) for fast data transfer and RS-485 for bulk data transfer. Battery storage is provided for prolonged energy back up and ultracapacitor for transient and momentary power support during dynamic phase. The PV interface of this microgrid is investigated under various conditions such as large variation in its radiation level, maximum power point tracking, centralized control for active power, co-ordinate active and reactive power control with de-centralized operation, hierarchical control functionality of PV source with other microgrid sources etc. The intermittent nature of photovoltaic source causes a peculiar impact on the microgrid operation. This and other important observations are analyzed for further study and investigations into the control aspects of PV sources in a microgrid paradigm. The key simulation and experimental results are included to verify proper operation and control of the microgrid. © 2014 IEEE.