The general problem of DG placement deals with the size of DG and its location, but at the same time this placement must be economically justifiable. To gain benefits of DG placement, the DG must be optimally sized and placed. The paper uses analytical expressions for determination of optimal size and a methodology for optimal location of DG placement. The solar PV system is used as the distributed generator to be placed in primary distribution system for active power supply. The solar photovoltaic system is employed here as a type 1 distributed generator (DG) to supply active power to the distribution system. The methodology uses analytical expressions and is based upon the exact loss formula. Along with the optimal size and location, this paper also presents the economics of this placement considering loss reduction and capacity relieving of the distribution substation. © 2018, Springer Nature Singapore Pte Ltd.