In this paper a novel hybrid harmonic compensation approach for non-linear loads is developed and analysed. This technique provides compensation for current harmonics coming from a nonlinear load and reactive power regulation even during grid's voltage disturbances. The method could be implemented on any Series Active Filter. Meanwhile the Transformerless configuration (TSeAF) is selected in this work to address power quality issues of a non-linear load. In the first step the source current distortions are extracted from the sensed nonlinear load currents. Then, to improve the compensation's behaviour this new strategy uses voltage harmonic distortions to make the grid current remain as clean as possible with a small gain G proportional to current harmonic components. The strategy is evaluated on an Ideal CSC non-linear load. Then a single-phase bridge rectifier with R-L load is taken as the nonlinear load. This strategy operates in regular conditions, while it keeps a perfectly sinusoidal current wave form during disturbances initiated by the grid. Simulations results confirm the effectiveness of the proposed method.