Large-scale, grid-connected photovoltaic systems have become an essential part of modern electric power distribution systems. In this paper, a novel approach based on the Markov method has been proposed to investigate the effects of large-scale, grid-connected photovoltaic systems on the reliability of bulk power systems. The proposed method serves as an applicable tool to estimate performance (e.g., energy yield and capacity) as well as reliability indices. The Markov method framework has been incorporated with the multi-state models to develop energy states of the photovoltaic systems in order to quantify the effects of the photovoltaic systems on the power system adequacy. Such analysis assists planners to make adequate decisions based on the economical expectations as well as to ensure the recovery of the investment costs over time. The failure states of the components of photovoltaic systems have been considered to evaluate the sensitivity analysis and the adequacy indices including loss of load expectation, and expected energy not supplied. Moreover, the impacts of transitions between failures on the reliability calculations as well as on the long- term operation of the photovoltaic systems have been illustrated. Simulation results on the Roy Billinton test system has been shown to illustrate the procedure of the proposed frame work and evaluate the reliability benefits of using large-scale, grid-connected photovoltaic system on the bulk electric power systems. The proposed method can be easily extended to estimate the operating and maintenance costs for the financial planning of the photovoltaic system projects.