As renewable energy sources interconnected to the electric grid increase, deploying distributed energy storage systems along the grid is a viable solution to sustain grid stability. One of the critical aspects of any energy storage system is its efficiency in transferring power to the grid. Another important aspect is managing high power levels in a short time and being easily expandable in terms of energy capacity and power handling. For this reason, supercapacitors are suitable energy storage devices to fulfill these requisites. This article focuses on analyzing the losses and improving the efficiency of a supercapacitor energy storage system based on a modular multilevel converter, which accomplishes all the abovementioned functions and capabilities. The analyzed energy storage system is based on submodules, including the power electronic interface and the supercapacitors. Hence, the system can be easily expanded because the submodule provides the functions of balancing the energy storage devices, the DC/AC, and the DC/DC conversions by using the modular multilevel converter topology approach. Therefore, any number of submodules can be connected, and the operator can make an array of the desired power, energy, and voltage ratings. This study details a probabilistic loss analysis for the proposed supercapacitor energy storage system and presents a case study using 3000F supercapacitor cells for a 6.6 kW single-phase system. The improved submodule version is validated through simulations and experimentally with a lab-scale prototype. The results show how the proposed methodology increases the system's overall efficiency with a 95 % confidence level.