Currently, large-scale solar farms are being rapidly integrated in electrical grids all over the world. However, the photovoltaic (PV) output power is highly intermittent in nature and can also be correlated with other solar farms located at different places. Moreover, the increasing PV penetration also results in large solar forecast error and its impact on power system stability should be estimated. The effects of these quantities on small-signal stability are difficult to quantify using deterministic techniques but can be conveniently estimated using probabilistic methods. For this purpose, the authors have developed a method of probabilistic analysis based on combined cumulant and Gram– Charlier expansion technique. The output from the proposed method provides the probability density function and cumulative density function of the real part of the critical eigenvalue, from which information concerning the stability of low-frequency oscillatory dynamics can be inferred. The proposed method gives accurate results in less computation time compared to conventional techniques. The test system is a large modified IEEE 16-machine, 68-bus system, which is a benchmark system to study low-frequency oscillatory dynamics in power systems. The results show that the PV power fluctuation has the potential to cause oscillatory instability. Furthermore, the system is more prone to small-signal instability when the PV farms are correlated as well as when large PV forecast error exists.