This paper presents a new technique for enhancing power quality by reducing harmonics in the neutral conductor. Three-Phase Four-Wire (3P4W) system is commonly used where single and three phase loads are connected to Point of Common Coupling (PCC). Due to unbalance loads, the 3P4W distribution system becomes unbalance and current flows in the neutral conductor. If loads are non-linear, then the harmonic content of current will flow in neutral conductor. The neutral current that may flow towards transformer neutral point is compensated by using a series active filter. In order to reduce the harmonic content, the series active filter is connected in series with the neutral conductor by which neutral and phase current harmonics are reduced significantly. In this paper, solar PV based inverter circuit is proposed for compensating neutral current harmonics. The simulation is carried out in MATLAB/SIMULINK and also an experimental setup is developed to verify the effectiveness of the proposed method.