This paper presents the dual‐mode control to improve the power quality (PQ) of three‐phase four‐wire grid interfaced photovoltaic (PV) battery system in a single‐stage configuration, where the current control is used at normal circumstances for the grid‐interactive mode and for the grid interruption, the system operation is through the voltage control. The transient free switching between grid interactive and off‐grid modes is executed by a power electronics switch, thus at disconnection, the system gives reliable and incessant power to the loads. The weight of the active current constituent from the load current is acquired using Mathew's algorithm‐based adaptive filter. The voltage control regulates the frequency and voltage across the loads in off‐grid mode. The current control used for a voltage source converter mends the PQ namely current harmonics extenuations and unity power factor operation and it utilizes the solar PV's array power feed‐forward unit for the enhancement of the system's dynamic performance. The incremental conductance technique is applied for obtaining the maximum PV array's power. The addition of a battery across the DC link is realised using a DC–DC buck‐boost converter. The battery is discharged and charged in accord with the load's variation. This converter's control sustains the maximum power point tracking voltage. The system's performances for the steady‐state and dynamic situations, such as solar insolation change, load perturbation, load unbalancing and neutral current compensation, are authenticated on a developed prototype through test results.