Fault tolerant (FT) operation in photovoltaic (PV) inverters is gaining increased attention in order to improve system availability. Conventional string PV inverters lack the ability to eliminate the leakage currents of the system during fault modes of operation. Therefore, traditional PV inverters are modified through modulations and structures to tolerate such faults. However, proper operation and control of FT-PV-inverters remain challenging, particularly on the better utilization of the extra added components. This paper proposes a new modulation method for eliminating the PV inverter leakage current in normal and faulty modes of operations. The sinusoidal based pulse width modulation (PWM) scheme is modified for implementing the new proposed modulation. In addition, the proposed PWM is capable of preserving full rating and energy efficiency operation of the inverter with leakage current elimination in both the normal and faulty operating modes. The proposed inverter and modulation method are implemented and tested at various conditions. The results confirm the superiority and leakage current elimination capability of the new proposed PWM method.