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The main objective of this study is to increase penetration level of photovoltaic (PV) power production in the grid by considering line overvoltage and transformer overloading limitations. The study presents a reactive power control method based on sensitivity analysis for grid-connected distributed solar inverters. The sensitivity analysis shows that reactive power support is more effective on the grid voltage regulation if the solar inverter is located at the end of the feeder. Therefore, higher power factor (PF) should be set for the inverter which is connected closer to substation due to smaller impedance observed from connection point to upstream network. Based on this knowledge, location-dependent PF set values are assigned to each solar inverter. In order to prevent unnecessary reactive power absorption from the grid, active power variation is also measured and considered in the control method. Compared to the equally fixed PF dispatching among inverters, the proposed method provides smaller network losses and MV/LV transformer loading that allows more PV system installations. Performance comparison of different reactive control methods is achieved by simulation of a real test network. Additionally, experimental reactive power control setup has been built together with a solar simulator and a single-stage 2-level inverter. The setup verifies that the control method can be easily integrated into inverters.