Loads in low voltage (LV) residential areas are mainly single-phase types which are supplied from a delta/wye connected distribution transformer (DT) with a grounded neutral conductor creating a three-phase (3P) four-wire (4W) distribution system. The unbalanced single-phase load distributions in traditional 3P-4W LV networks cause significant neutral currents which can result in the overloading of the neutral conductor and electrical safety concerns for customers. In this paper, the dependency of the load generated neutral current on the distribution line variable zero sequence R/X ratios is developed, and a new decentralized robust active neutral compensation method is proposed using a multi-functional transformer-less three phase (3P) four leg (4L) photovoltaic (PV) smart voltage source inverter (SVSI). System stability is verified from the bode analysis and the improved neutral compensation is evaluated from the circuitry model analysis. Actual single-phase customer loads with real sun irradiance and temperature profiles are used with an urban 3P-4W LV network model from Australia and implemented in simulation using the PSCAD/EMTDC software to verify the efficacy of the proposed controller in real world distribution networks. Different transient faults analyses and point of common coupling dynamic voltage regulation are also performed and faster fault recovery, better neutral compensation, and optimized voltage profile are achieved from the designed PV-SVSI.