Abstract. Digital images of the sky obtained using a total sky imager (TSI) are classified pixel by pixel into clear sky, optically thin and optically thick clouds. A new classification algorithm was developed that compares the pixel red-blue ratio (RBR) to the RBR of a clear sky library (CSL) generated from images captured on clear days. The difference, rather than the ratio, between pixel RBR and CSL RBR resulted in more accurate cloud classification. High correlation between TSI image RBR and aerosol optical depth (AOD) measured by an AERONET photometer was observed and motivated the addition of a haze correction factor (HCF) to the classification model to account for variations in AOD. Thresholds for clear and thick clouds were chosen based on a training image set and validated with set of manually annotated images. Misclassifications of clear and thick clouds into the opposite category were less than 1%. Thin clouds were classified with an accuracy of 60%. Accurate cloud detection and opacity classification techniques will improve the accuracy of short-term solar power forecasting.