Smart grid technologies allow the electric grid to better adapt to the dynamic behavior of renewable energy and distributed generation, helping both consumers and utilities to access these resources and harvest their benefits. Today's grid needs to shift from centralized supply sources to fixed, predictable loads and to accept power from the renewable and distributed energy resources all over the grid. As these resources are intermittent in nature, the grid needs integrated monitoring and control, as well as integration with substation automation, to control differing energy flows and to plan for standby capacity to absorb the intermittent generation. The major part in a solar photovoltaic (PV) system is the t conversion stage and its characteristics dominate the behavior of the solar PV system. Intelligent interfaces to a PV system that allow the grid to handle two-way flows of power and communication are required and would allow the seamless integration of solar technologies in high-penetration scenarios. In this paper, the smart grid features are reviewed with a focus on renewable energy integration. This is followed by surveying commercially available transformerless inverters for solar PV applications and their features vis-a-vis smart grid. The description and the simulation of a proposed transformerless inverter are included in this paper.