A new simplified space vector PWM method for a three-level inverter is proposed in this paper. The three level inverter has a large number of switching states compared to a two-level inverter. In the proposed scheme, three-level space vector PWM inverter is easily implemented than as conventional two-level space vector PWM inverter. This paper presents a novel DC link balancing scheme for a back-to-back system with three-level diode clamped topologies. The proposed algorithm is improvement of the variable switching frequency control strategy formerly introduced with the three-level back-to-back system and it relays on measurement of adjacent capacitor voltages which provide information about the potential variation in consecutive nodes of the three-level DC link network, Therefore, the proposed method can also be applied to multilevel inverters. In this work, a three-level inverter using space vector modulation strategy has been modeled and simulated.