A low voltage (LV) distribution level static compensator (dSTATCOM) is shown capable of regulating the positive sequence reactive power within a network while simultaneously cancelling zero and negative sequence currents that are introduced by load unbalance or by high levels of distributed photovoltaic (PV) generation. Instantaneous reactive power theory shows that DC-bus capacitor power will fluctuate at twice mains frequency during unbalanced operation and negative sequence currents will produce significantly higher voltage ripples than either positive or zero sequence currents. High rating non-polarized bus capacitors can be applied if the negative sequence currents are restricted. The paper proposes a method that allows a compensator with finite rating to best allocate its capacity to negative sequence, zero sequence and reactive power compensation.