Photovoltaic (PV) units along with other distributed energy resources (DERs) are located close to each other in distributed systems and they are equipped with different controllers. In such systems each manipulated variable may affect several controlled variables causing interaction between the input/output loops and degrade the dynamic performance of the system. This paper presents several case studies to quantify the degree of interaction and identify proper input output signals to minimize the impact of negative interaction. A robust control is also designed with the proper input output signals to alleviate these interactions and enhance the dynamic performance. It is found that negative dynamic interaction can adversely affect the performance of the distribution system and the designed controller can improve the performance by minimizing the negative interactions.