When paralleling multiple inverters that are capable of operating as an island, the inverters typically employ the droop control scheme. Traditional droop control enables the decentralized regulation of the local voltage and frequency of the microgrid by the inverters. The droop method also enables the inverters to share the real and reactive power required by the loads. This paper focuses on some of the limitations of parallel islanded single phase inverters using droop control. Algorithms with the aim to address the following limitations in islanded operation were proposed: reactive power sharing and reduction of the voltage harmonic distortion at the point of common coupling (PCC). Experimental results were then presented to show the suitability of the proposed algorithms in achieving reactive power sharing and in improving the voltage harmonic distortion at the PCC.