This paper compares the cost and efficiency of two inverter topologies for a 5-kW grid-connected solar inverter application: the Conventional H-Bridge Inverter (CHB) and the Cascaded H-Bridge Multilevel Inverter (CHBMLI). Emphasis is put on power switches and passive elements with a detailed study of the losses. Both designs respect the same constraints (cost, efficiency, and junction temperature of the transistors) to ensure a fair comparison between both topologies. The work highlights the important parameters when choosing the components (MOSFETs, capacitors, and magnetic cores for the inductors). The DC-link voltage ripple and the output AC current ripple are the key parameters for the design of the passive elements (capacitors and inductors). On top of that, the transistors MOSFETs are chosen, in both topologies, to limit the conduction losses (by selecting the Rdson) and the switching losses (by selecting the Qrr and dv/dt). Real components are picked in order to make the comparison as complete as possible. Numerical simulations are performed using the MATLAB platform. All equations and parameters are provided. A CHBMLI prototype was built with eight independent H-Bridges to validate the proposed design with thermal and efficiency measurements.