An improved carrier‐based pulse‐width‐modulation (CBPWM) technique for a three‐level (3L) F‐type neutral point‐clamped (FNPC) inverter is presented in this paper. By using the proposed modulation scheme, the DC‐link capacitor voltage at the neutral point is balanced. For manufacturers, reliability is one of the major concerns for all power electronics devices and parts. This paper proposes an extensive reliability analysis of the 3L‐FNPC inverter. Considering the mean time to failure (MTTF) of each device, the reliability of the 3L‐FNPC inverter is analyzed in this present work by using two different methods, which are the approximate method and the exact method. To compute the failure rate of the equipment, only the number of components is considered in the approximate method. Alternatively, exact methods are utilized to evaluate the reliability of a system by knowing the different stress levels and various operating environments of a specific system. Because of the strong correlation between device failure and temperature stress factors, power loss analysis is used in the exact method. The MATLAB Simulink environment is used to determine the power loss of the switching devices. A solar off‐grid photovoltaic (PV) system is considered for reliability testing. Experimental mission profile data are used to estimate the lifetime of the 3L‐FNPC inverter by applying the rainflow counting algorithm, the Coffin‐Manson model, and Miner's rule. The competitiveness, effectiveness, and reliability of the 3L‐FNPC inverter with the proposed modulation technique are validated using a hardware prototype.