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A new control technique is presented for the AC grid connection of distributed generation and parallel-connected inverters. The proposed control technique is based on a modification of the power angle droop control method and uses only locally measured feedback signals. An improvement in transient response, including large step transients, is achieved since the coupling filter parameters are taken into consideration when deriving the power angle of a droop controller. Unlike conventional techniques, the proposed technique is stable and minimises the active and reactive power swing for large load changes. The method achieves good active and reactive power sharing and minimises circulating current between parallel connected units and the grid connection, for both linear and nonlinear loads. Improved transient response is obtained while maintaining power-sharing precision, or output voltage and frequency accuracy. Simulation and experimental results validate that performance is better than that attained with conventional droop- based approaches.