Distributed generation (DG) integration benefits are manifold. When integrating into existing infrastructure, it reduces line losses when properly placed with the objective of loss minimization and at the same time it improves the system voltage profile. Besides these technical benefits there are economic and environmental benefits like upgrades deferment, reduction in operation and maintenance cost, reduction in greenhouse gases and a lot more. The paper proposes optimal DG placement for loss minimization in the distribution system. The DG considered here is solar photovoltaic system as type 1 distributed generator which supplies real power to the system. The analytical method is used for loss minimization problem using exact loss formula. The optimal DG capacity is determined for the objective of real power loss minimization as well as reactive power loss minimization. It is established and proposed that loss minimization with respect to DG placement is more if optimal DG sizes are determined with the objective of reactive power loss minimization. The economic benefits of the placement are determined and are distributed among the utility and the prosumer. © 2019, Institute of Advanced Scientific Research, Inc.. All rights reserved.