Multilevel power converters are key elements in the electrical grid-tied energy systems. This paper presents a novel topology for stacked multicell (SM) multilevel converters. The suggested SM converter has considerable interests of applications for interconnection of energy systems (renewable energy generation systems, energy storage systems, HVDC (high voltage direct current) systems, FACTS (flexible alternating current transmission system) devices, and custom power devices) to the electric power systems. The main advantages of the proposed converter, compared to the conventional SM converter, for attaining the aforementioned purpose are the reduction of the DC voltage energy sources from two to one, power switches (IGET's) voltage rating, converter cost and size, losses, and installation area. The proposed SM converter has been analytically modeled by obtaining the switching instants of the PWM in terms of the Kapteyn series. Numerical solution results for the derived model of the proposed converter, simulation results, and measurements taken from an experimental set-up are presented in order to validate the operation and performance of the suggested multilevel topology. The proposed SM converter has been exploited in a dynamic voltage restorer (DVR). This proposed custom power device is based on the one energy storage device (battery, capacitor, super capacitor) with halved voltage rating owing to utilizing the suggested SM multilevel inverter (DC/AC converter) as an interface between its energy storage component and the electrical grid. Simulation results confirm the capability of the suggested energy storage based grid-tied custom power device (DVR) in solving power quality problems. (C) 2012 Elsevier Ltd. All rights reserved.