Grid-connected solar photovoltaic (PV) system significantly contributes to worldwide renewable energy growth and penetration, specifically the integration of PV system into the grid has become an important issue in the last decade because of the huge expansion of new power plants. Modular multilevel converter (MMC) is an upcoming promising converter technology for medium-/high-voltage applications, which has unique features such as modular structure, enhanced energy harvesting capability, scalability and so on. This paper presents a combined system of static Var generator (SVG) and PV power generation based on MMC which is capable of the maximum power point tracking (MPPT) capability. The integrated system is proposed to achieve higher performance as SVG in a distorted and unbalanced medium-voltage large-current load situation. The main functions involve managing reactive power and unbalance compensation, voltage regulation and harmonic cancellation and also ensuring the source-end three-phase currents sinusoidal and balanced. A 20-kW, 1-kV PV-MMC-based SVG was modeled and simulated in the PSIM simulation platform. The feasibility and effectiveness of the proposed combined system was demonstrated by several test results.