SummaryPhotovoltaic (PV) systems benefit from the cascaded H‐bridge multilevel inverter (CHMLI) topology due to its high flexibility and efficiency. However, PV mismatches in three‐phase grid‐connected systems result in an unbalanced power supply, which leads to an unbalanced grid current. Proportional integral derivative (PID) controllers can be used to control H‐bridge inverters because of their simplicity of tuning as well as their basic structure. However, due to the nonlinearity and high sensitivity of the PID controller, its performance declines as a result of high overshoot, high settling time, and high rise time during significant external disturbances. Moreover, the switching angle of the inverter must be adjusted to provide the required fundamental voltage while reducing harmonic content. In order to address this problem, a control technique with modulation compensation is proposed. The present work offers a two‐degree‐of‐freedom fractional‐order PID controller with an integrated filter (2DOF–FOPID–IF). Moreover, the optimum switching angles are determined for the CHMLI by employing an improved sparrow optimization (ISO) algorithm. To prove the practicality of the suggested technique, simulation, and experimental data are compared with the existing techniques. The proposed technique shows better performance in terms of settling time, overshoot, rise time, and low harmonics.