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In this paper, a novel current control technique is proposed to control both active and reactive power flow from a renewable energy source feeding a microgrid system through a single-phase parallel-connected inverter. The parallel-connected inverter ensures active and reactive power flow from the grid with low-current total harmonic distortion even in the presence of nonlinear load. A p-q theory-based approach is used to find the reference current of the parallel-connected converter to ensure desired operating conditions at the grid terminal. The proposed current controller is simple to implement and gives superior performance over the conventional current controllers, such as rotating frame proportional-integral controller or stationary frame proportional resonant controller. The stability of the proposed controller is ensured by direct Lyapunov method. A new technique based on the spatial repetitive controller is also proposed to improve the performance of the current controller by estimating the grid and other periodic disturbances. Detailed experimental results are presented to show the efficacy of the proposed current control scheme along with the proposed nonlinear controller to control the active and reactive power flow in a single-phase microgrid under different operating conditions.