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This paper presents a modulation and controller design method for paralleled Z-source inverter systems applicable for alternative energy sources like solar cells, fuel cells, or variable-speed wind turbines with front-end diode rectifiers. A modulation scheme is designed based on simple shoot-through principle with interleaved carriers to give enhanced ripple reduction in the system. Subsequently, a control method is proposed to equalize the amount of power injected by the inverters in the grid-connected mode and also to provide reliable supply to sensitive loads on-site in the islanding mode. The modulation and controlling methods are proposed to have modular independence so that redundancy, maintainability, and improved reliability of supply can be achieved. The performance of the proposed paralleled Z-source inverter configuration is validated with simulations carried out using Matlab/Simulink/Powersim. Moreover, a prototype is built in the laboratory to obtain the experimental verifications.