In this paper, a novel capacitive-coupled STATCOM in three-phase power system is proposed, which can lower the rating of the conventional inductive-coupled STATCOM. Thus, this feature benefits by reducing the system initial cost, switching loss and electromagnetic interference (EMI) problems. The modeling, V-I characteristic of the capacitive-coupled STATCOM is proposed and investigated compared with the inductive-coupled case. Finally, simulation results are given to verify the viability and effectiveness of the proposed novel STATCOM and its compensation characteristic.