Abstract: With the large-scale integration of distributed energy resources and the increasing complexity of the grid load structure, power quality issues such as insufficient reactive power, harmonic pollution, and voltage fluctuations in the distribution network have become increasingly prominent. These problems have adverse effects on the safe and stable operation of the power system and the normal operation of user electrical equipment. To address this issue, this paper proposes a novel hybrid transformer solution that combines the functions of a traditional transformer with capabilities such as power quality management, reactive power compensation, thereby achieving both energy transfer and unified regulation.