DG units, such as photovoltaic (PV) modules and shunt capacitors, are being used to reduce power losses in distribution systems, especially in the context of India where ATC losses are around 20–25%. The goal is to find out the appropriate size and location of these DG units to optimize their benefits. The research paper introduces a systematic approach utilizing a competitive optimization algorithm termed as the “IMPERIALIST COMPETITIVE ALGORITHM” (ICA). This algorithm is employed to strategically determine the optimal placement of Distributed Generation (DG) units in power systems. This optimized placement not only offers technical benefits but also addresses environmental considerations. To validate this approach, the paper uses a standard IEEE 69-bus test system across various load levels (nominal, light, and heavy). The results acquired from applying the proposed method to this system are compared with other optimization techniques, likely from previous studies, to showcase the effectiveness and strength of the ICA approach.