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This paper addresses the timely issues of modeling of, and defining selection criteria for, a solid state fault isolation device (FID) to be used in power electronic based distribution systems (PEDS). Circuit interruption requirements and FID location in power electronics based distribution system are discussed in this paper. The paper subsequently derives the FID parameters by mapping the characteristics of a conventional medium-voltage distribution system onto that of the PEDS envisioned under a new multi-university Engineering Research Center funded by the National Science Foundation. A design of a high frequency solid state transformer (SST) is presented and evaluated. An average-value simulation model of a SST, as the interface of the PEDS to the legacy system, is used to derive key parameters of the FID. The simulation and experimental results validated the feasibility of the proposed FID topology. Finally, the conceptual Power Hardware-in-the-Loop simulation setup for testing the FID under various system conditions is presented.