The huge value of the electricity consumption in different residential, commercial, industrial and agricultural sectors lead to the load-generation mismatch, voltage drops, cascading failures, and wide area blackouts. Therefore, the use of renewable energy resources based distributed generation (DG) units is rapidly growing in order to satisfy not-supplied electrical demand and reduce greenhouse gas emissions. Meanwhile, optimal placement of DG units in radial grids is crucial for minimization of the total active power losses and the voltage drops. This chapter proposes a novel backward-forward sweep (BFS) based methodology for optimal allocation of DG micro-plants in radial distribution systems aiming to minimize total real power losses of the whole system. Voltage permitted range limit and feeder capacity criterion are considered as optimization constraints. Simulation of BFS based DG placement method is conducted on the 33-bus distribution network to investigate its performance under different scenarios.