The paper proposes optimal placement of dispatchable distributed generation units along with solar photovoltaic as distributed generator (DG) and subsequent optimal capacity operation of the dispatchable DG units in presence of solar photovoltaic (SPV) generation, i.e. when SPV generation is available. It is proposed here that these dispatchable DG units when operated at co-ordinated optimal capacity, in presence of SPV generation, result in further loss reduction without an additional DG unit installation The additional loss reduction so obtained results in more loss reduction and subsequent saving in loss cost. In this paper, a methodology is presented for optimal placement of solar photovoltaic distributed generation (SPVDG) in presence of other optimally placed dispatchable DG units with the assumption that the dispatchable DGs units were present in the distribution system before insertion of optimal SPVDG. An effective methodology is presented here for optimal operation of dispatchable DGs in presence of SPV generation. It is proposed and established that DG technologies (which are dispatchable in nature), must be operated at different optimal capacities than their respective installed optimal capacity, for further loss reduction when solar generation is available. This optimal operation defers the additional DG capacity addition for system loss reduction and at the same time provides a reduction in operational cost for certain dispatchable DG types. It is proposed that in presence of SPVDG, other distributed generators must be operated at somewhat reduced optimal capacity, but at their respective optimal location, for hours, when photovoltaic generation is available. This enables a reduction in their operational cost as well. © 2021, The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.