A three-stage variable step-size incremental conductance algorithm is proposed, which divides the operating steps into three modes by setting the upper and lower thresholds of the step-adjustment coefficients to ensure that the whole system can still operate with a relatively large step size when the illumination intensity changes drastically. The problem of a slow dynamic response speed for the traditional conductance incremental method is avoided. The simulation results show that, this algorithm can shorten the dynamic response time of this system to 5-6 ms. Moreover, the power oscillation near to the maximum power point is obviously weakened, the power loss of this system is also reduced, and the tracking accuracy is enhanced.