Renewable energy becomes an emerging trend in many countries. Photovoltaic (PV) technology has been gaining an increasing amount of attention due to its unpolluted operation. Importantly, the PV system should be utilized with safety awareness. The problem of hotspot takes place due to the mismatch in the irradiation of the cells in the PV module. Under the hotspot condition, the unshaded part of the module operates at a current level higher than the shaded cell. As a result, the affected cells start to dissipate power leading to an increase in the temperature. Afterward, the hotspot reduces performance and brings damage to the PV module. This paper presents the hotspot detection algorithm that can integrate with the PV’s MPPT system. The method uses the concept of characteristic curves analysis and the rate of current changes under reversed bias conditions to detect the hotspot. Moreover, the algorithm displays the PV system’s status indicator after the detection completes. The implementations in different testing cases, including various PV sizing at different irradiation levels. Results confirm the performance of the proposed algorithm, showing the accuracy with fast detection.