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This study presents a systematic way to evaluate reliability performance of large grid-connected photovoltaic (PV) power systems considering variation of input power and ambient-condition-dependent failure rates of critical components including PV modules, inverters, and capacitors. State enumeration is used to analyze real-life grid-connected PV systems. Ambient-condition-dependent failure rates of major components in PV systems are formulated and incorporated in reliability analysis. A series of reliability indices are defined to quantify PV systems' reliability performance. In addition, sensitivity analyses are extensively conducted to investigate the impact of different factors on the performances of PV power systems. Test results on a practical 20-kW PV project are presented to demonstrate the effectiveness of the proposed method.