Improper detection of islanding situation of a microgrid leads to undesirable mode of operation which causes power quality issues, reclosing failures, and serious equipment damage. Therefore, detection of islanding is a crucial challenge for protection schemes in the microgrid. In this work, a new islanding detection technique based on rate of change of superimposed impedance (ROCSI) is proposed. The voltage and current signals measured at PCC are used to estimate the impedance (Z). This estimated impedance is used to calculate the value of index (M), which is used to discriminate between islanding and non islanding events. To test the efficacy of proposed islanding detection technique, different islanding events (IE) and non islanding events (NIE) are created on modified IEEE 13 bus system integrated with two 2 MW solar photo voltaic distributed generations (PVDGs). The entire system is modelled and simulated on MATLAB/SIMULINK environment. Proposed islanding detection technique clearly identifies the IE during different active power mismatch, reactive power mismatch conditions and different quality factor loads. It also clearly identifies the NIE during load switching, single pole tripping, feeder disconnection, faults, and adjacent DG disconnection.