In this study, several recently published topologies are analyzed for reactive power generation capability. It has been found that some of the topologies with their conventional modulation strategies are not suitable for reactive power applications. These are not able to generate zero voltage states during negative power flow. As a result, current is distorted and PV inverter injects current with high total harmonic distortion (THD) into the grid. In order to overcome these problems, modified modulation technique is proposed to achieve reactive power capability without having distortion in injected grid current. It provides path for current to flow in order to generate zero voltage states during negative power flow. With improved modulation strategies, reactive power generation is achieved in inverter topologies without any alteration on the converter structures. The controller software of these topologies is only required to be updated for reactive power generation. The implementation and generation of the proposed improved modulation techniques are straightforward and it can easily be realized. Moreover, single phase transformerless inverter topologies are classified for first time on the basis of reactive power handling capability. In order to verify the theoretical explanations, simulations have been carried out in Matlab/Simulink environment and validated through an experimental setup.