This paper proposes a new, reliable and efficient microgrid structure which incorporates PV arrays and SOFC interconnected via Voltage Source Inverter (VSI) as an alternative to reduce the detrimental impact of energy generation on atmosphere using fossil fuels. Inorder to meet the growing energy demands, the excessive usage of nonrenewable energy resources disregarding the environmental impacts resulted in major environmental problems. As a result the spotlight is turned towards promotion of energy production from renewable energy sources like solar, wind, tidal, geothermal etc. Taking into consideration the aforesaid concept, this paper proposes a hybrid microgrid consisting of PV-SOFC with VSI based PI controller working in an islanding mode so that voltage and frequency is maintained in their acceptable limits and the output demonstrated using Matlab/Simulink shows the efficacy of the controller in providing efficient energy which gives the lowest environmental impacts