Methods and systems are provided for modeling temperature characteristics of components in a system such as a power module for a hybrid or electric vehicle. A power dissipation value is calculated for each of the components in the system. A first filter is applied to the power dissipation value associated with a selected component to determine its estimated temperature. For each of the neighboring components located adjacent to the selected component, a cross-coupling temperature is estimated by applying other filters to each of the power dissipation values for the neighboring components. The estimated temperature of the selected component and the estimated cross-coupling temperatures for each of the neighboring components can then be added to thereby estimate the operating temperature for the selected component. Further, the operation of the system may be adjusted if the operating temperature determined for the selected component exceeds a threshold value.