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Fault diagnosis and condition monitoring are important to increase the efficiency and reliability of photovoltaic modules. This paper reviews the challenges and limitations associated with fault diagnosis of solar modules. A thorough analysis of various faults responsible for failure of solar modules has been discussed. After reviewing relevant work, a monitoring tool is designed using thermography and artificial intelligent systems that allows the detection of various types of faults in PV modules and at the same time the designed tool aims to filter the nonsignificant anomalies. A neural network (NN) classifier is applied to the transfer characteristics (I‐V data) of the faulty PV module for the diagnosis which adapts multilayer perceptron (MLP) networks to identify the type and location of occurring faults. The Discrete wavelet transform (DWT) based signal processing technique is utilized in the feature extraction process to reduce the NN input size. The developed detection algorithm is adapted for 24/7 automated surveillance. For a given fault condition, the average fault detection time is observed to be <9 seconds, which is lower than the previous work done. The developed algorithm achieved 100% accuracy when tested on a predetermined fault data set. [ABSTRACT FROM AUTHOR]