Objective: To analyze the effect of optimized size inverter for Nawabshah Sindh Pakistan on the annual energy injected to ac grid and energy loss. Methods: Using the optimized sizing ratio of 1.4664, which is the ratio of rated photovoltaic system to the rated inverter size the simulations are carried out in MATLAB for 3 kW and 50 kW photovoltaic systems. A comparison between the conventional sized system that is the photovoltaic system and inverter of the same size and optimized system where the photovoltaic inverter is connected with respect to the sizing ratio are taken and simulations are carried out using real time data of solar irradiation and ambient temperature of Nawabshah Sindh Pakistan in MATLAB for one year. Findings: It is seen that 5830 kWh and 97,162 kWh energy is annually injected to the utility grid or load and annual power loss of 274 kWh and 4568 kWh from conventional sized 3 kW and 50 kW PV systems, respectively. While the annual energy injected to the ac grid is 5852 kWh and 97,529 kWh and annual power loss of 252 kWh and 4201 kWh from optimized sized 3 kW and 50 kW PV systems, respectively. Novelty: Thus, we can say that the optimized system not only reduces the size of the inverter but also improves the system efficiency and reduces the losses which eventually decreases the capital cost of the PV system and energy production.