This paper presents a binary hybrid multilevel inverter (BHMLI) based grid-connected solar energy conversion system (SECS), controlled by damped second-order generalized integral (DSOGI). The BHMLI architect has a cascaded half-bridge array, which modifies the DC-link of the H-bridge of the voltage source inverter, and results in approximate reference waveform. It reduces the dV/dt of the H-bridge switches and improves output waveform quality. The DSOGI control damps the oscillations and overshoots and provides longer service period of low power switches at transient conditions. It is implemented in the multilevel inverter application for the first time in literature. The SECS is designed to inject active power to the grid, and also mitigates the harmonic and reactive power demands of the load. The cascading of 'n' half-bridges and one H-bridge generate (2 (nC1) − 1) output voltage levels. The maximum power extraction from solar photovoltaic (PV) array is achieved through incremental conductance (IC) algorithm based maximum point tracking (MPPT) operation of the DC-DC converter. An isolated single-input multipleoutput single-ended primary inductance converter (SIMO-SEPIC) realizes it. SECS with 15-level BHMLI is analyzed with extensive simulation as well as with a hardware prototype. Moreover, the shunt active filter functionality of the system at various load conditions are verified and maintained the grid power quality within the IEEE-519 standard throughout the operation. The laboratory developed setup is tested for 5 kW, 400 V, three-phase system, and the experimental analysis at steady-state and dynamic variations of load-side and insolation variations validate the theoretical claims. INDEX TERMS Multilevel inverter, SIMO-SEPIC, solar PV, power quality.