This study proposes a coordinated control algorithm for two parallel-operated distributed generation (DG) systems fed from different renewable energy sources. The control algorithm ensures accurate control of reference active power generation from the inverters in the DG systems. In addition to reference power generation, the control algorithm also offers compensation of harmonics and reactive currents of the local loads by utilising the remaining capacities of the inverters in the DG systems. For this purpose, the control algorithm estimates compensating factors for each inverter based on the distributed harmonic and reactive currents. The inverter with a higher surplus capacity contributes to higher compensation and vice versa. The harmonic and reactive currents of the load are extracted using least mean mixed-norm adaptive algorithm for effective compensation. Furthermore, the control algorithm automatically switches to low-voltage ride through (LVRT) on sensing the grid faults. During LVRT, the active power generation by the inverters in DG systems is reduced and reactive currents are injected to support the grid recovery. The proposed control scheme is thoroughly investigated using computer simulations and hardware-in-the-loop-based experiments to show its feasibility and effectiveness.