The penetration of solar energy into centralized electric grids has increased significantly during the last decade. Although the electricity from photovoltaics (PVs) can deliver clean and cost-effective energy, the intermittent nature of the sunlight can lead to challenges with electric grid stability. Smart inverter-based resources (IBRs) can be used to mitigate the impact of such high penetration of renewable energy, as well as to support grid reliability by improving the voltage and frequency stability with embedded control functions such as Volt-VAR, Volt–Watt, and Frequency–Watt. In this work, the results of an extensive experimental study of possible interactions between the unstable grid and two residential-scale inverters from different brands under different active and reactive power controls are presented. Two impedance circuits were installed between Power Hardware-in-the-loop (P-HIL) equipment to represent the impedance in an electric distribution line. Grid voltage and frequency were varied between extreme values outside of the normal range to test the response of the two inverters operating under different controls. The key findings highlighted that different inverters that have met the same requirements of IEEE 1547-2018 responded to grid instabilities differently. Therefore, commissioning tests to ensure inverter performance are crucial. In addition to the grid control, the residential PV installed capacity and physical distances between PV homes and the substation, which impacted the distribution wiring impedance which we characterized by the ratio of the reactive to real impedance (X/R), should be considered when assigning the grid-supporting control setpoints to smart inverters. A higher X/R of 3.5 allowed for more effective control to alleviate both voltage and frequency stability. The elimination of deadband in an aggressive Volt-VAR control also enhanced the ability to control voltage during extreme fluctuation. The analysis of sudden spikes in the grid responses to a large frequency drop showed that a shallow slope of 1.5 kW/Hz in the droop control resulted in a >65% lower sudden reactive power overshoot amplitude than a steeper slope of 2.8 kW/Hz.