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This paper presents a novel control strategy for parallel inverters of distributed generation units in an AC distribution system. The proposed control technique, based on the droop control method, uses only locally measurable feedback signals. This method is usually applied to achieve good active and reactive power sharing when communication between the inverters is difficult due to its physical location. However, the conventional voltage and frequency droop methods of achieving load sharing have a slow and oscillating transient response. Moreover, there is no possibility to modify the transient response without the loss of power sharing precision or output-voltage and frequency accuracy. In this work, a great improvement in transient response is achieved by introducing power derivative-integral terms into a conventional droop scheme. Hence, better controllability of the system is obtained and, consequently, correct transient performance can be achieved. In addition, an instantaneous current control loop is also included in the novel controller to ensure correct sharing of harmonic components when supplying nonlinear loads. Simulation and experimental results are presented to prove the validity of this approach, which shows excellent performance as opposed to the conventional one.