This paper presents modeling, design and analysis,of a Grid-connected Hybrid Photovoltaic Fuel Cell System (HPVFCS) with a reactive power compensation feature. A hydrogen based fuel cell is a proven technology and its use along with the photovoltaic system (PV) can lead to energy stability in grid-connected or standalone systems. In this paper, the Voltage Source Converter (VSC) is connected between the DC output of HPVFCS and an AC grid. The control strategy employed guarantees the maximum utilization of the PV array and the optimum use of an FC. The active and reactive power of VSC can be controlled independently using P-Q control theory. The additional function of the reactive power compensation using P-Q control theory can enhance the performance of the distribution systems where HPVFCS system is connected. Its applicability is verified by the test bench created with MATLAB/Simulink (R) (C) 2017 Hydrogen Energy Publications LLC. Published by Elsevier Ltd. All rights reserved.