A system and method for controlling a grid-connected reactive power compensation inverter. The system uses a combination of feedforward and feedback controls to compute a reference voltage signal based on sensor-measured voltages and currents, where the reference voltage signal is used to control the inverter switches. The disclosed method modifies a cross-couple feedforward signal used in the reference voltage calculations, where the modified cross-couple signal includes a combination of both reference and actual currents, and the modified control scheme reduces the DC-link voltage overshoot experienced during a capacitive overload event while still providing the required reactive power and maintaining grid system stability.