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This paper deals with the problem of designing the optimum stand alone solar thermal power system (STPS) which achieves the minimum total cost and satisfies the required level of reliability. For this purpose, an optimization model is developed to enable the engineers to find the size of the collector area and the storage capacity which provide the lowest cost system when the costs of the subsystems are taken into account on a life cycle basis. Also, a statistical and analytical method is presented to calculate the reliability level of the stand alone system. This reliability level is measured by the loss of power supply probability (LOPS). In reliability evaluation issue, there is a complex interaction between the load being met, the weather and the temporal correlation between them. The state of charge of the storage system characterizes the continuity of service of the stand alone system. The interdependancy between the load demand and the system output is treated to reflect more accuracy in evaluating the LOPS. Both the optimization model and the reliability mothod are used in a unified approach to obtain the lowest cost and reliable design for the stand alone STPS.