Abstract: A novel topology for cascaded multilevel inverters which is suitable for renewable energy source interfacing to grid is proposed in this paper. The proposed topology significantly reduces the usage of number of dc voltage sources, switches, and power diodes as the number of output voltage levels increase. The world electrical energy consumption is rising and there is a steady increase of the demand on the power capacity, efficient production, distribution and utilization of electrical energy. The traditional power systems are changing, number of renewable energy sources such as wind turbines, photovoltaic generators, fuel cells, small hydro, wave generators, are being integrated into power systems at distribution level. The multilevel converters plays an essential part in the integration of the renewable energy sources.