This paper proposes a photovoltaic (PV)-battery hybrid system based on the cascaded H-bridge (CHB) inverter, which not only makes the irregular PV power smoother but also limits the grid current under grid voltage dips. Different from the conventional configuration where the PV and the battery inverters are paralleled on the grid side, the proposed CHB based hybrid system connects the AC sides of the PV inverter and the battery inverter in cascade. Thus, the multilevel inverter output voltage is available. Compared to the conventional configuration, the proposed system offers the improved electromagnetic compatibility (EMC) and better harmonic performance. The computer simulation has been given to verify the validity of the proposed system and control strategy.