Modular multilevel converters (MMCs) are being developed for the grid connection of offshore wind or tidal farms. In order to reduce the construction and maintenance costs, it is desirable to reduce the weight and volume of the MMC systems. In most existing MMC submodule designs, the reservoir capacitor usually accounts for over 50% of the total volume and 80% of the total weight. This paper presents a new circuit topology and control principle for a submodule based on a stacked switched capacitor (SSC) architecture that can significantly reduce the capacitor size in an MMC. Practical considerations for a high-voltage high-power system implementation are presented in this paper through the design and simulation of a 21-level, 40 kV (pole-pole dc), 19.1 MW, grid-connected MMC system. The proposed MMC submodule design is further verified experimentally on a scaled down 400 V, 12.3 Apeak laboratory prototype. It is shown that with the proposed SSC-architecture, the total volume of capacitors in each submodule can be reduced by more than 40% without significantly increasing power losses.