Load shedding is a common scenario in developing countries to mitigate the high-power demand. Normally, a low power backup supply is used for essential home-loads only, viz. essential lighting and fan loads. However, there always is a need of essential backup power supply for household applications during load shedding hours. Currently, rooftop, grid-connected, solar photovoltaic (PV) based inverters are being extensively used for home based backup power supply. These inverters have unidirectional power flow i.e. from generation side (PV source as well as utility grid supply) towards the home-load side. However, during a fully charged battery condition, as charging is done by the utility grid too, the power of solar PV modules gets underutilized as the solar energy is only partially used for charging the battery. The proposed supervisory switching control system, in conjunction with a conventional, low-cost home based inverter/UPS, adds up improved control features which ensure the reliability of the power supply and/or complete utilization of solar energy while operating in economy mode. In economy mode, only solar energy is utilized to meet the load demand during sunshine hours and thereafter. In case of repeated and prolong load shedding, the proposed controller selects a reliable mode of operation where batteries are allowed to be charged both from utility grid as well as solar PV modules. Thus, two modes of control offer maximum harnessing of solar energy as well as better standby power supply, respectively. The proposed controller has been successfully implemented with the residential microgrid (existing home based inverter system for backup power supply). The proposed system also works as home-to-grid (H2G) system to meet load demand and peak load of utility grid during the sunshine hours by islanding the residential microgrid (home-loads System.)