Abstract This paper presents a methodology for modeling and calculating PEM FCPP reliability. It includes the development of a state-space method to calculate the stand-alone PEM FCPP reliability using Markov Model (MM). The state-space method includes different states such as operation, derated, fully faulted or maintenance since FCPP (FC) power plants are subject to a number of possible outage and derated states. The aging failures in the state-space generation model of a PEM FCPP are estimated based on the assumption that failure and repair rates of the components change with operational age of FC. The functional relationship between FC age and transition rates, namely failure and repair rates are estimated based on the fuzzy set theory and expert knowledge. The simulation results are obtained using matlab software package for a 5kW stand-alone PEM fuel cell, which supplies power to a typical residential house.