IEEE has signed a Memorandum of Understanding (MOU) with the U.S. Department of Energy (DOE) to address grid modernization challenges in 2016. As part of the collaboration initiative, the U.S. DOE has asked IEEE to develop a white paper on the impact of IEEE 1547 standard on smart inverters. This white paper serves not only to support the U.S. DOE initiatives in this important area, but also to provide important information and education to IEEE membership. This white paper presents smart inverter features along with the implementation challenges and potential solutions. The paper starts with an introduction to smart inverter functions. It then describes the smart inverter modeling, protection, power quality, ride?through, distribution planning, interoperability, and testing and certification.