In this paper, we propose new algebraic Gramians for continuous-time switched linear systems, which satisfy generalized Lyapunov equations. The main contribution of this paper is twofold. First, we show that the ranges of those Gramians encode the reachability and observability spaces of a switched linear system. As a consequence, a simple Gramian-based criterion for reachability and observability is established. Second, a balancing-based model order reduction technique is proposed and, under some sufficient conditions, stability preservation and an error bound are shown. Finally, the efficiency of the proposed method is illustrated by means of numerical examples.