This paper presents a sliding mode controller (SMC) for a cascaded two-level inverter (CTLI)-based grid connected/ stand-alone photovoltaic (PV) system with double-band hysteresis scheme. The nonlinear SMC based PV system has been designed to inject the desired amount of active power even with variable solar irradiance and load change. The proposed topology employs PV module driven cascaded two-level inverter, connected the grid/load, through an open winding three-phase transformer. The controller is developed keeping the maximum power delivery of the PV in consideration. The performance of the proposed controller has been improved by using an adaptive hysteresis band calculation. The proposed control of the CTLI based PV system is implemented in MATLAB/Simulink, for both steady state and dynamic conditions. The results verify the effectiveness of the transient and steady state operation of the proposed control strategy. Moreover, the SMC is found capable of keeping the switching frequency at the designed value almost accurately.