In this article, a novel pulsewidth modulation (PWM) technique is proposed for an existing space vector hysteresis current controller (SVHCC) scheme. A three-level neutral-point-clamped (NPC) inverter is used for dual purpose of shunt active power filtering and solar photovoltaic (PV) power integration to a distribution grid. This dual-purpose NPC inverter utilizes the proposed PWM technique for solving the neutral-point voltage-balancing issue in a unique way. Due to the inherent advantages of the SVHCC, the current control is characterized by fast action and optimal switching. A single reference current required for both filtering and maximum PV power integration is generated using instantaneous power theory, where a diode bridge rectifier load is considered to demonstrate the controller performance while compensating nonlinear current components. Thus, not only a unique space-vector-based PWM technique is adopted for fast-tracking of currents, but also a sliding current error boundary is used for the first time. This sliding technique tackles the dc-link balance issue of the NPC inverter while controlling the output currents simultaneously. The simulation and hardware results prove the aforementioned performance and demonstrate the efficacy of the proposed PWM current controller.