This paper presents a capacitive-coupling voltage source inverter (VSI) for single-phase grid connected photovoltaic (PV) system, which can achieve active power transfer and reactive power compensation simultaneously. The operation principle of the capacitive-coupling VSI was analyzed and compared with the conventional inductive-coupling VSI. Theoretical study indicates that capacitive-coupling grid-connected VSI can achieve the required power control with lower inverter voltage rating, which reduces the initial cost and operational losses. A single-phase PV integration system with capacitive-coupling VSI is implemented, in which a boost-half-bridge dc-dc converter is used. The boost-half-bridge dc-dc converter is selected due to its low cost, simple control method and high efficiency. The adaptive duty cycle control method for maximum power point tracking (MPPT) is used. The control system of the capacitive-coupling VSI is also implemented, which can transfer the active power from the dc converter to the ac grid and keep the dc-link voltage stable. Simulation results are provided to verify the validity of the capacitive-coupling VSI for PV integration. Comparison with inductive-coupling VSI is also done, which show that the capacitive-coupling VSI is able to transfer the same amount of power with a much lower dc-link voltage.