The LCL-type grid connected inverter has been widely used as the intelligent power interface between the distributed generation unit and the power grid. To reduce the cost and volume of the filter, it is desirable to design the LCL filter with higher resonance frequency provided that the quality of injected grid current is not compromised. Actually, it is the typical case for the T-type or NPC three-level inverter to design its LCL resonance frequency close to half of the switching frequency. In this case, however, the sideband effect of SPWM modulation can impose a significant impact on the system stability, and the traditional ZOH model is inadequate to describe the dynamic behavior of the digital SPWM modulator. In this paper, by extending the multi-frequency model to AC system, the stability of the grid-connected inverter is examed with the consideration of sideband effect. An interesting discovery in this paper is that the influence of grid voltage on the system stability can be successfully predicted, which provides a useful tool to study the stability of inverter in presence of large grid voltage disturbances. Experimental results from a down-scaled threephase inverter confirm the effectiveness of stability analysis.