The invention provides a cascade connection multi-level inversion system and a modulation method and controller. The modulation method of the invention comprises steps of obtaining a voltage signal, a current signal, a power grid voltage signal and a power grid current signal of each DC source to perform maximum power point tracking, obtaining firs modulation signals which are imbalance in inhibition power, outputting the first modulation signals to various invert units to realize maximum power point tracking and control and inhibition of power imbalance; obtaining a reactive current order value and an active current order value according to calculation and a current signal of a reactive compensation device, calculating to obtain a second modulation signal which makes an output power factor of a cascade connection inverter system 1 and outputting the second modulation signal to the reactive compensation device, wherein the reactive current order value is equal to a reactive compensation current component and is opposite in direction of the reactive compensation current component, and the output power factor of the cascade connection multi-level inverter system is 1 and requirements of the power grid is satisfied.