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Increased variability, and uncertainty getting induced in the power system with the growing penetration of renewable resources necessitates the need for power flow stability studies, analysis, and contingency responses to address various operational concerns. Utilization of Volt–VAR (VV) functions of inverters to mitigate voltage violations have been introduced in recent grid integration standards. All the new grid connected nonsynchronous generators are expected to provide a composite power delivery at continuous rated output power as well as they should participate in dynamic reactive power injection while maintaining the power factor within an acceptable range. The present case study is based on a voltage instability incident which led to partial blackout in state grid, which is also identified as one of the root causes of power system blackouts worldwide. The state power grid case study has been simulated using real-time power grid data collected from PMUs/SCADA system for all 400 and 220 kV nodes. The location for integrating solar PV renewable energy in state grid is identified using an analytical methodology, by deriving an evaluation index represented as improved power stability index. An approach for employing VV functionality of inverter based grid connected solar photovoltaic system, as a solution to address the voltage instability issue that occurred in the conventional grid, is elaborated. The article also illustrates islanding using generator coherency identification. [ABSTRACT FROM AUTHOR]