Recently, wireless sensor networks (WSNs) have been used in various smart grid applications, including remote power system monitoring and control, power fraud detection, wireless automatic metering, fault diagnostics, demand response, outage detection, overhead transmission line monitoring, load control, and distribution automation. However, harsh smart grid environment propagation characteristics cause great challenges in the reliability of WSN communications in smart grid applications. To this end, the analysis of wireless link reliability and channel characterizations can help network designers to foresee the performance of the deployed WSN for specific smart grid propagation environments, and guide the network engineers to make design decisions for the channel modulation, encoding schemes, output power, and frequency band. This paper presents a detailed analysis of low power wireless link reliability in different smart grid environments, such as 500 kV outdoor substation environment, indoor main power control room, and underground network transformer vaults. Specifically, the proposed analysis aims to evaluate the impact of different sensor radio parameters, such as modulation, encoding, transmission power, packet size, as well as the channel propagation characteristics of different smart grid propagation environments on the performance of the deployed sensor network in smart grid. Overall, the main objective of this paper is to help network designers quantifying the impact of the smart grid propagation environment and sensor radio characteristics on low power wireless link reliability in harsh smart grid environments. (C) 2012 Elsevier B.V. All rights reserved.