Conventional droop characteristics for microgrids have been primarily proposed to achieve proper load sharing between the various distributed generation units. This paper proposes a different perspective for designing autonomous microgrids, which aims at reducing the power consumption of the microgrid by utilizing the concept of conservation voltage reduction. The proposed control strategy relies on a voltage–current (V–I ) droop characteristic, designed to perform demand side management through voltage control. The effectiveness of the proposed control scheme is demonstrated through time-domain simulation studies considering voltage dependent loads tested over a range of loading conditions and power factors. The performance of the proposed scheme is compared to the conventional and adaptive P-f/Q-V decentralized droop control. Further, a comparison of the transient analysis of the three droop schemes in case of a fault has been evaluated. The proposed V–I droop control scheme can maximize the number of loads being supplied during power shortage.