This review paper offers a comprehensive examination of the various types of faults that occur in inverters and the methods used for their identification. The introductory segment investigates the internal component failures of voltage-source inverters (VSIs), examining their failure rates and the consequent effects on the overall system performance. Subsequently, this paper classifies and clarifies the potential malfunctions in components and sensors, placing particular emphasis on their frequency of occurrence and the severity of their impact. The examination encompasses issues associated with transistors, including open circuits, short circuits, gate firing anomalies, as well as failures in capacitors, diodes, and sensors. Following this, the paper delivers a comparative assessment of fault diagnosis techniques pertinent to each type of component, appraised against specific criteria. The concluding section encapsulates the findings for each fault category, delineates the fault detection and diagnosis (FDD) methodologies, analyzes the outcomes, and provides recommendations for future scholarly investigation.