This work presents a cost-motivated method for reliability health monitoring of an electrolytic capacitor. The monitoring system uses a combination of analogue and digital electronics to optimize the cost. The capacitor aging is detected by on-line and in-situ detection of the evolution of the ESR (Equivalent Series Resistance) which is the most reliable ageing indicator. The algorithm uses waveforms naturally present in the power electronic train and thus the condition monitoring can be performed continuously and without interruption of the industrial process. The monitoring method estimates the ESR by adjusting a capacitor model that emulates the monitored capacitor. The limitation in accuracy of the estimation has no significant influence on the lifetime determination. The principle of the method is explained, along with the design tradeoffs and the monitoring procedure is described in detail. The paper also presents the experimental results obtained from a prototype during accelerated in-situ/inverter ageing tests.