ABSTRACT Distribution system operators are facing distributed energy resources connection requests in low voltage distribution networks. Since low voltage networks are traditionally not planned, the requests are assessed by comparing them to the rules defined in the national regulations. We analyze the Croatian regulatory framework and investigate the distributed energy resources connection rules defined in the Croatian regulations. Furthermore, we present an analytical framework to calculate the static hosting capacity and dynamic operating envelopes defined as dynamic hosting capacity. Multiple case studies and scenarios are defined to assess the possibility of the distributed energy resources connection in the real‐world low voltage network model using smart meter electricity demand measurements. The results show shortcomings of the traditional approach since the grid code rules either underestimate hosting capacity or allow the distributed energy resources connection that endangers the network's safe operation. Based on the objective function, strictly following regulatory limits can result in an underestimation of possible generation by up to 360% or an overestimation of around 10%. Similar trends are observed for additional demand, with the network's capacity to accommodate new units being overestimated by nearly 300% or underestimated by more than 70% on a daily basis. Furthermore, the results suggest distribution system operators should implement novel concepts due to a more precise assessment of the distributed energy resources integration, allowing new installations and ensuring low voltage networks are operated within the boundaries. The steps for implementing the presented concepts in distribution systems are discussed. Findings of the study enable distribution system operators to move away from traditional approaches and end‐users to further invest in distributed energy resources units, creating economic and environmental benefits.