This paper presents a hyperbolic tangent function (HTF) based higher order adaptive control algorithm with a perturb & observe (P&O) MPPT (Maximum Power Point Tracking) for a three phase grid connected single stage SPV (Solar Photovoltaic) system with DSTATCOM (Distribution Static Synchronous Compensator) capabilities. The variable learning based HTF reduces the mean square error in the system, thereby improving the response of the system. This algorithm is easily implemented with simple mathematical formulations and calculations. The system is tested under various abnormal conditions such as load unbalancing, variable solar insolation etc. and test results have demonstrated the fast response of the control algorithm. The distortion levels of voltage/current are found within limits as defined in an IEEE-519 standard while feeding active power to grid and connected loads.