The output characteristics of photovoltaic cells are strongly nonlinear, and the maximum power point tracking technique can improve the efficiency of photovoltaic systems. Traditional fixed step-size algorithm must take a compromise between the steady-state accuracy and the response speed in selecting step. Variable step-size algorithm has good performance at the same light intensity, while it exists dead zone of maximum power point tracing when the external conditions change drastically. A new variable step-size incremental conductance method based on power prediction is proposed. This method adopts a new step-size adjustment coefficient. It can adjust the step size according to the change of external conditions and solve the contradiction between tracking speed and steady-state precision. When the illumination changes drastically, the algorithm ensures that the judgments before and after the disturbance are carried out on the same power curve to avoid the occurrence of misjudgment. Simulation results show the effectiveness of the proposed algorithm.