Connection a PV system to the grid needs a power electronics inverter, which injects harmonics into the grid. These harmonics prevail along the grid not only at the connection bus. So that, this paper presents a methodology to determine the best location to connect PV system to the grid in order to minimize the total harmonic distension (THD) within the grid. In addition, the methodology determines the permissible PV penetration level to keep the THD within limits, without using harmonics mitigation techniques, at all buses in the system according to IEEE standard. For penetration levels, which cause the THD out of the standard values, the paper uses shunt active filter (SAF) as mitigation technique for a large number of harmonics. Moreover, the paper studies the effect of load location variation and generation location variation on the best integration bus. The suggested methodology is applied on IEEE-9 bus as standard system. The system modeling and simulation are carried out using MATLAB/SIMULINK platform.