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In this paper, the load and/or grid connected to an inverter is modeled as the combination of voltage sources and current sources at harmonic frequencies. As a result, the system can be analyzed at each individual frequency, which avoids the difficulty in defining the reactive power for a system with different frequencies because it is now defined at each individual frequency. Moreover, a droop control strategy is developed for systems delivering power to a constant current source, instead of a constant voltage source. This is then applied to develop a harmonic droop controller so that the right amount of harmonic voltage is added to the inverter reference voltage to compensate the harmonic voltage dropped on the output impedance due to the harmonic current. This forces the output voltage at the individual harmonic frequency to be close to zero and improves the total harmonic distortion (THD) of the output voltage considerably. Both simulation and experimental results are provided to demonstrate that the proposed strategy can significantly improve the voltage THD.