The power system dynamics have consistently challenged the rapid and persistent proliferation of photovoltaic (PV) systems in power systems. In this paper, the authors propose the generalized discrete‐time equivalent model (GDEM) of PV power generation system using a fourth‐order dynamic equivalent model for representing the physical characteristics of PV power stations in power system dynamic studies. In addition, the authors propose a grid‐connected system model which includes modelling interfaces (MIs) for the GDEM of power grid and the GDEM of PV power generation system in dynamic studies. The proposed equivalent models of the power grid and PV power generation system will improve the simulation accuracy and speed in dynamic power system studies. The authors have used the IEEE 14‐bus system and simulated various types of short‐circuit faults and PV penetration levels in their study to demonstrate the merits of the proposed GDEM of grid‐connected system in power systems. The pertinent simulation results are analyzed and conclusions are presented.