In recent years, the integration of renewable energy sources and their unpredictable nature has posed significant challenges to power grid stability and voltage regulation. To address these issues, the Modular Multilevel Converter (MMC) based Static Synchronous Compensator (Statcom) has emerged as a promising solution for reactive power compensation and voltage improvement. However, one critical concern in MMC-Statcom operation is the voltage balancing of DC capacitors, which directly affects system performance and efficiency. In this research, a novel DC capacitor voltage balancing strategy is proposed for MMC-Statcom to ensure optimal operation and enhanced performance. The proposed strategy employs advanced control algorithms and innovative switching techniques to maintain balanced DC capacitor voltages under varying operating conditions. By achieving balanced capacitor voltages, the MMC-Statcom can effectively compensate reactive power and regulate the grid voltage with improved efficiency and stability. The effectiveness of the proposed DC capacitor voltage balancing strategy is extensively evaluated through simulation studies and experimental validations. Comparative analyses are performed with existing voltage balancing methods, demonstrating superior performance and robustness of the novel strategy. The results showcase its potential for practical implementation in real-world power systems. Overall, this study presents a significant advancement in MMC-Statcom technology, providing an effective solution for reactive power compensation and voltage improvement while ensuring reliable and stable grid operation. The proposed novel DC capacitor voltage balancing strategy holds the promise of contributing to the enhancement of power system stability and facilitating the integration of renewable energy sources in modern electrical grids.