This paper presents a novel approach to rigorously quantify power Output Variability from a fleet of photovoltaic (PV) systems, ranging from a single central station to a set of distributed PV systems. The approach demonstrates that the relative power Output Variability for a fleet of identical PV systems (same size, orientation, and spacing) can be quantified by identifying the number of PV systems and their Dispersion Factor. The Dispersion Factor is a new variable that captures the relationship between PV Fleet configuration, Cloud Transit Speed, and the Time Interval over which variability is evaluated. Results indicate that Relative Output Variability: (I) equals the inverse of the square root of the number of systems for fully dispersed PV systems; and (2) could be further minimized for optimally-spaced PV systems. (c) 2010 Elsevier Ltd. All rights reserved.