Cascaded multilevel inverters (MLIs) generate an output voltage using series-connected power modules that employ standard configurations of low-voltage components. Each module may employ one or more switched capacitors to double or quadruple its input voltage. The higher number of switched capacitors and semiconductor switches in MLIs compared to conventional two-level inverters has led to concerns about overall system reliability. A fault-tolerant design can mitigate this reliability issue. If one part of the system fails, the MLI can continue its planned operation at a reduced level rather than the entire system failing, which makes the fault tolerance of the MLI particularly important. In this paper, a novel fault location technique is presented that leads to a significant reduction in fault location detection time based on the reliability priority of the components of the proposed fault-tolerant switched capacitor cascaded MLI (CSCMLI). The main contribution of this paper is to reduce the number of MLI switches under fault conditions while operating at lower levels. The fault-tolerant inverter requires fewer switches at higher reliability, and the comparison with similar MLIs shows a faster dynamic response of fault detection and reduced fault location detection time. The experimental results confirm the effectiveness of the presented methods applied in the CSCMLI. Also, all experimental data including processor code, schematic, PCB, and video of CSCMLI operation are attached.