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A simple and robust procedure with good transient response is proposed for d-q voltage control in conjunction with harmonics reduction in the output of stand-alone single-phase inverters. The distortion in the load voltage waveform is mainly due to the voltage drop in the filter-inductor caused by the harmonic components of the current. For extracting the in-phase and quadrature signals from harmonic-rich periodic waveforms, a composite observer has been developed, which is faster and more accurate than a simple observer. Separate observers have been provided for the voltage and current signals. Feed forward compensation has been obtained by using the quadrature components derived from the composite current observer. Further, an Inverter could be modeled as a feed back control system with the fundamental component as the desired output and the harmonics as the noise creeping into the output. The well-known control strategy of using a large feed back around the noise signal can be employed to reduce its effect at the output, exhibiting low total harmonic distortion under non-linear loads. The controllers can be easily modeled in the discrete-time domain and the ideas can be directly implemented digitally for single-phase inverters controlled by FPGA or DSP chips.