Small scale energy requirement is met by distributed network energy resources (DNERs). Renewables are gaining much importance when compared to conventional one due to their cleanliness. For the safe operation of grid connected and islanded mode of operation protection coordination intervals are designed correctly. As the number of PV based DNERs increase the magnitude of fault current will decrease. It provides the greater challenge to power system engineers if exceeds the loading limits. To limit the effect of fault magnitude a protection algorithm is designed. A voltage and current based protection algorithm is presented which can accurately discriminate between the fault during utility ties and islanded modes of operation. The new algorithm is implemented in standard IEEE 9 bus reference system. © 2019 IEEE.