Recently, there has been an increase in the interest surrounding the integration of solar photovoltaic (PV) systems in the low voltage (LV) distribution network. This is due to many benefits, such as low generation costs, high efficiency, scalability, etc. However, large PV penetration at the distribution network can cause voltage levels to rise beyond the acceptable limits of the grid codes. Large amount of losses can also occur due to the reverse power flow resulting from the high penetration level of distributed PV generation units integrated into the distribution network. In this paper, a novel methodology based on a gradual increase in the PV penetration level is presented to determine the maximum PV penetration level in the LV distribution networks. PV penetration is defined as the ratio of the peak PV active generation to the peak active demand of the load. The IEEE European LV test feeder has been used as a test case to validate the proposed methodology. Real PV and load data, from residential customers in Ausgrid's electricity network, New South Wales (NSW), Australia, has been used to generate seasonal and worst-case PV generation and load profiles. The PV penetration in the network is increased to find the levels at which the voltage violations occur. PV penetration level with the minimum losses throughout the year is considered as the maximum acceptable level. Various analyses of real data have been used to find the optimal maximum level of PV penetration at the distribution network level.