The paper presents efficiency and power loss analysis in a high-frequency, seven-level diode-clamped inverter (7LDCB). The inverter is composed of four-level (4L) diode-clamped branches based on MOSFET transistors and Si Schottky diodes. The range of DC-link voltages enables the operation of the inverter in connection with a single-phase power grid. The tested inverter can be controlled using various modulation concepts that affect its parameters, but also energy losses. Carrier-based modulation, which may be useful in a few applications, is compared to selective modulation based on the state machine (SM-based) algorithm. The article demonstrates the efficiency level of the inverter as well as the influence of the modulation method and switching frequency on the efficiency and loss distribution in semiconductor devices. The article also shows the hardware implementation of a complex modulation algorithm based on selective switching states used to maintain voltage balance on three DC-link capacitors. Redundant switching states allow the generation of the same voltage but with the use of a selected DC-link capacitor. This makes it possible to balance the DC-link voltage with the load current. The article presents experimental results, which show the advantage of using the modulation method with selective switching states. First, it allows for equalizing the loading of DC-link capacitors. The second advantage is a more uniform distribution of losses in semiconductor components.