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Distributed Generation (DG) systems based on inverters connected to low-voltage electrical grids, such as low power PV systems in buildings, require reliable islanding detection algorithms in order to determine the electrical grid status and operate the inverter properly. Passive and active islanding detection methods are local detection techniques which have been presented and analyzed in literature. The first approach is based on current and voltage measurements at the inverter side of the point of common coupling (PCC) between the electrical grid, the local load and the DG system. Active methods introduce a disturbance at the PCC in order to reveal the islanding condition. This paper proposes a new hybrid detection algorithm based on monitoring of high-frequency components of the DG system output power due to PWM, the output LCL filter and the employed current controller. Wavelet analysis is applied to obtain time localization of the islanding operation mode. Simulation results show the performance of the proposed detection algorithm.