Multilevel converters are growing fast, whereas industry needs particular tools to evaluate efficiency and performance of such converters. This study focuses on the analysis and practice of power losses in a three-level neutral-point clamped (NPC) inverter. First, a precise mathematical model for three-level inverters is introduced to be used for simulating power losses of the switches, providing AC voltage and current of each phase, voltage and current of the switches as well as both the conduction and switching losses. Further, an NPC inverter was developed to validate the analytical work by comparing experimental results with those of simulations. Additionally, the thermal modelling of semiconductors is obtained using datasheet parameters. Then, the temperature rise is further modelled using the power losses along with the thermal model in the form of RC ladder. Finally, the lifetime of semiconductors is predicted using the heating curves in line with the power-cycling concept. The measured power losses and temperatures in comparison with the presented model suggest this kind of research as an applicable replacement for expensive measuring devices.