Grid connected transformer-less Photovoltaic inverter known as highly efficient and reliable inverter concept (HERIC) is derived from the industrial-standard full-bridge topology with two additional switches on ac side. This paper presents a detection and localization method for open-circuit (OC) failures in the semiconductor switches of HERIC inverter. Fault detection based on sliding mode observer (SMO) is proposed for the ac bypass switches and an average current estimator is used to detect failures in the main switches of full bridge inverter. Two parallel SMOs are developed based on the state space model of the converter under different OC fault conditions in ac bypass leg. Observed grid current and measured grid current are used to obtain the residual which determines the location of OC fault in the inverter. The key advantage of the proposed method is that it does not require additional sensors for fault diagnosis which will improve the system robustness. Efficacy and reliability of the proposed method is validated using simulation studies. © 2022 IEEE.