A solution to the incessant energy demand and heavy dependency on the mains grid for electricity is that the surplus energy generated from the non-conventional energy sources using microgrids be contributed back to the mains grid. This can be achieved by using a system for interfacing the microgrid to the mains grid with the help of a grid tie inverter. This inverter converts DC power from the microgrid into AC power with its phase and frequency locked with that of the grid itself. Such a system model is discussed in this paper along with the design of a 3kW single phase prototype grid tied inverter with 3-level PWM for the use at household level. The system also, consists of a switching unit between the microgrid and the mains grid to provide electricity to the load depending on the supply levels. Additionally, the net consumption and distribution of units are accounted for by a bi-directional meter connected in place of the conventional meter.