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In this paper, a three-level three-leg ac-dc-ac converter for single-phase applications is investigated. The operating principles and control strategies for the topology are presented. It is shown that dc-link voltage balancing and its reduction are important objectives in the system design. The proposed pulsewidth modulation (PWM) strategy permits the dc-link capacitor voltage balance and also its reduction. The three-level converter is compared to the two-level converter in terms of rms switch currents, harmonic distortion, losses, and costs. Experimental and simulation results are presented to validate the theoretical studies.