The fast expansion of distributed renewable energysources has hastened the development of islandedcommunity microgrids, where maintaining voltagestability, power quality, and system dependabilityis still a major problem. Multilevel inverters(MLIs) have developed as a viable option due totheir ability to produce high-quality output voltagewhile reducing switching stress and total harmonicdistortion (THD). This paper offers a detailedinvestigation into the stability enhancement ofislanded single-phase community microgridsemploying various multilevel inverter topologiescombined with modern modulation methods,including Selective Harmonic Elimination (SHE).The suggested methodology compares differentMLI setups in terms of voltage control, harmonicperformance, dynamic responsiveness, and overallsystem stability under diverse load situations. TheSHE approach is used to selectively removedominant lower-order harmonics. A comparisonstudy may be performed using MATLAB/Simulinksimulations to assess the efficiency of differentmodulation schemes in enhancing inverterperformance in an islanded microgrid setting.The results show that combining multilayerinverter topologies with SHE dramaticallydecreases THD, increases voltage stability, andimproves transient responsiveness when comparedto traditional modulation approaches. Furthermore,the suggested technique assures that communitymicrogrids operate reliably even under nonlinearand changing demand situations. The studyconcludes that hybrid modulation-based MLIcontrol is a potential approach to deliveringreliable, efficient, and high-quality power supply infuture decentralized energy systems.