This study proposes a high efficient bi-directional inverter for a photovoltaic (PV) system integrated with an energy storage system. The proposed bi-directional inverter controls the bi-directional power flow and satisfies the power requirement between the grid and the dc sources. The proposed bi-directional inverter achieves high efficiency by employing a transformerless structure and by minimising the power losses. The inverter structure can suppress the leakage current, which is considered to be one of the most important design parameters in a transformerless PV system. The efficiency and leakage current of the proposed bi-directional inverter are analysed. Furthermore, its bi-directional operation principles and control method are described. Finally, a 3-kW prototype is implemented to confirm the theoretical analysis and the validity of the proposed bi-directional inverter.