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In this paper, a minimal-order observer-based control method is proposed for small power utility connected photovoltaic (PV) systems. In the proposed method, the PV power is controlled according to load variation to minimize the frequency deviation. Load power and diesel power are estimated successfully by a minimal-order observer. From the estimated load power, load variation index is calculated. A second-order low-pass filter is used to produce PV base power from available maximum PV power. Then, the PV base power is added with the load variation index to generate the command PV power. The proposed method is compared with the method where maximum power point tracking control is used to produce the command PV power. From simulation results, it has been found that the proposed method is effective to reduce the frequency deviation of the utility and also delivers PV power near maximum PV power.