As the number of sub-modules (SM) connected in series in one arm increases, the hardware cost of Modular Multilevel Converter (MMC) rises. It limits the development of MMC applied in the grid-connected PV system. To solve this problem, a Gradationally Controlled Modular Multilevel Converter (GC-MMC) is proposed and applied to the grid-connected PV system through analyzing the working principle and control strategy of gradationally controlled multi-level inverters. Aiming at the problem about controlling the voltage of capacitors, a capacitor voltage balancing controlled algorithm for GC-MMC is proposed. A grid-connected PV system based on GC-MMC is built with Matlab/Simulink. Compared with systems based on VSC and MMC, the simulation results show that the number of levels output by GC-MMC is higher than that of MMC. The filter is not needed by the grid-connected PV system based on GC-MMC, which reduces the hardware cost effectively. This work is supported by National Natural Science Foundation of China (No. 61803219).