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This study proposes the capacitance estimation of aluminum electrolytic capacitors in variable speed drives (VSDs) for fault diagnosis. The method estimates capacitance by observing the consumption of energy stored in electrolytic capacitors when power to VSD is turned off. In VSDs, electrolytic capacitors are commonly used to smoothen direct current-link (DC-Link) voltage, which is one of the key components. When voltage ripple increases or ambient temperature rises due to the surrounding components, the internal temperature of the electrolytic capacitor also increases, rapidly reducing the capacitor’s lifespan. Therefore, electrolytic capacitors have a shorter lifespan than the other components, and they are a major cause of failure in VSDs. The lifespan of capacitors can be estimated via decrease in capacitance, and the capacitance of capacitors can be approximated. The fault of the capacitor can be diagnosed through the capacitance reduction rate between the estimating and designed capacitance.