Six hundred houses were simulated in this study of the effect of varying solar photovoltaic penetration levels on peak load. In the simulations, demand response (DR) was implemented in the form of air conditioner (AC) load control to reduce the peak load. Results show that solar generation decreases the peak AC load, but this reduction diminishes as solar penetration increases. On the other hand, depending upon how demand response is implemented, the peak load may increase, decrease, or remain unchanged. GridLAB-D, a power system simulation tool, was used for research purpose.