A general growth is being seen in the use of renewable energy resources, and photovoltaic cells are becoming increasingly popular for converting green renewable solar energy into electricity. Since the voltage produced by photovoltaic cells is DC, an inverter is required to connect them to the grid with or without transformers. Transformerless inverters are often used for their low cost and low power loss, and light weight. However, these inverters suffer from leakage current in the system, a challenge that needs to be addressed. In this paper, a topology with two alternative connection models is presented to stabilize the common mode voltage and reduce the leakage current. The output voltage characteristic of the proposed inverter is five-level, which reduces the harmonic distortion in the output current compared to the two- and three-level inverters. The operation modes and output of the proposed topology are described and analyzed. The structures of the proposed inverter are simulated in MATLAB/Simulink and are compared with some well-known structures. Results show that the proposed structure with both connection models effectively reduces leakage current and improves grid current THD.