Hybrid microgrids that run on renewable energy are gaining popularity all over the world. PV and PMSG-based wind energy conversion systems are well-known and straightforward to install among numerous renewable energy sources. However, both wind speed and sun irradiation are uncertain and vary arbitrarily. As a result, the power generated by both PMSG and PV panels cannot be consistent. At the same time, the load varies erratically. Hybrid systems should have storage components to keep the balance of power between generation and load. A tiny battery, in addition to the fuel cell and electrolyzer, is included in the system to make it more cost effective. As a result, all Microgrid components must have a strong energy management mechanism to improve power quality. In standalone Microgrids, frequency response and power balancing are critical during rapid changes in source and load. To keep the energy management system in the framework, a Modified Fuzzy rule based innovative controller is built to achieve valuable and rapid reaction. A MIWO based SVPWM selection procedure is also used to a five level H-Bridge inverter to achieve additional quality power at the load bus. The THD of voltage diminished from 4.82% to 0.41% and current THD is from 4.43% to 0.77% when the modified compensator is connected in the system.