The invention provides a distributed power generation system and a communication performance diagnosing method thereof. The distributed power generation system comprises a plurality of input power supplies, a plurality of inverters, a manager and a remote terminal. The inverters are correspondingly connected with the input power supplies and connected with an alternating current power grid through a grid connection bus. The manager is respectively communicated with the inverters. The remote terminal is communicated with the manager. The manager and each inverter respectively comprises a data communication module, a control command communication module and a signal diagnosing communication module, wherein the data communication module is used for collecting the data of the inverters and transmitting and data to the remote terminal, the control command communication module is used for transmitting the control commands of the remote terminal to the inverters so as to control the inverters, and the signal diagnosing communication module is used for fast diagnosing the communication performance between the manager and the inverters. The distributed power generation system has the advantages that the communication performance of the power generation system (especially the manager) can be diagnosed fast, and communication problems can be discovered timely.