A scroll compressor includes a capacity modulation system. The capacity modulation system has a piston that is connected to the non-orbiting scroll that disengages the non-orbiting scroll from the orbiting scroll when a pressure chamber is placed in communication with the suction chamber of the compressor. The non-orbiting scroll member moves into engagement with the orbiting scroll when the chamber is placed in communication with the discharge chamber. The engagement between the two scrolls is broken when the pressure chamber is placed in communication with fluid from the suction chamber. A solenoid valve controls the communication between the pressure chamber and the suction chamber. By operating the valve in a pulsed width modulated mode, the capacity of the compressor can be infinitely varied between zero and one hundred percent.