I tend to agree with Bung that fancy optimization techniques are seldom warranted. I generally manually place capacitors in likely locations using the 1/3 rule if applicable and calculate the losses with a load flow program. Then move them to see if there is an improvement. There is very little difference in losses with wide variations of placement.
If you want to use a fancy approach anyway, there have been many papers written. A search on capacitor<and>optimize<and>placement in IEEE Explore yields:
An immune-based optimization method to capacitor placement in a radial distribution system
Shyh-Jier Huang;
Power Delivery, IEEE Transactions on , Volume: 15 , Issue: 2 , April 2000
Pages:744 - 749
Optimal capacitor placements in distribution systems. I. A new formulation and the overall problem
Chiang, H.-D.; Wang, J.-C.; Cockings, O.; Shin, H.-D.;
Power Delivery, IEEE Transactions on , Volume: 5 , Issue: 2 , April 1990
Pages:634 - 642
Optimal capacitor placement, replacement and control in large-scale unbalanced distribution systems: system modeling and a new formulation
Hsiao-Dong Chiang; Jin-Cheng Wang; Jianzhong Tong; Darling, G.;
Transmission and Distribution Conference, 1994., Proceedings of the 1994 IEEE Power Engineering Society , 10-15 April 1994
Pages:173 - 179
Fuzzy Approach for Optimal Placement and Sizing of Capacitor Banks in the Presence of Harmonics
Masoum, M.A.S.; Jafarian, A.; Ladjevardi, M.; Fuchs, E.F.; Grady, W.M.;
Power Delivery, IEEE Transactions on , Volume: 19 , Issue: 2 , April 2004
Pages:822 - 829
Optimal capacitor placement, replacement and control in large-scale unbalanced distribution systems: modeling and a new formulation
Hsiao-Dong Chiang; Jin-Cheng Wang; Jianzhong Tong; Darling, G.;
Power Systems, IEEE Transactions on , Volume: 10 , Issue: 1 , Feb. 1995
Pages:356 - 362
A new fuzzy-reasoning approach to optimum capacitor allocation for primary distribution systems
Ching-Tzong Su; Chih-Cheng Tsai;
Industrial Technology, 1996. (ICIT '96), Proceedings of The IEEE International Conference on , 2-6 Dec. 1996
Pages:237 - 241
Combined long-term optimization of radial primary distribution networks
Safigianni, A.S.; Salis, G.J.;
Electric Power Engineering, 1999. PowerTech Budapest 99. International Conference on , 29 Aug.-2 Sept. 1999
Pages:66
Optimal selection of capacitors in distribution systems
Ching-Tzong Su; Chu-Sheng Lee; Chin-Shen Ho;
Electric Power Engineering, 1999. PowerTech Budapest 99. International Conference on , 29 Aug.-2 Sept. 1999
Pages:301
Sensivity-based optimal capacitor placement on a radial distribution feeder
Bala, J.L., Jr.; Kuntz, P.A.; Taylor, R.M.;
Northcon 95. I EEE Technical Applications Conference and Workshops Northcon95 , 10-12 Oct. 1995
Pages:225 - 230
Capacitor placements for distribution systems with fuzzy algorithm
Hong-Chan Chin; Whei-Min Lin;
TENCON '94. IEEE Region 10's Ninth Annual International Conference. Theme: 'Frontiers of Computer Technology'. Proceedings of 1994 , 22-26 Aug. 1994
Pages:1025 - 1029 vol.2
Application of genetic based algorithms to optimal capacitor placement
Ajjarapu, V.; Albanna, Z.;
Neural Networks to Power Systems, 1991., Proceedings of the First International Forum on Applications of , 23-26 July 1991
Pages:251 - 255
Optimal placement and sizing of fixed and switched capacitor banks under nonsinusoidal operating conditions
Masoum, M.A.S.; Ladjevardi, M.; Fuchs, E.F.; Grady, E.M.;
Power Engineering Society Summer Meeting, 2002 IEEE , Volume: 2 , 21-25 July 2002
Pages:807 - 813 vol.2
Predicting and testing the effectiveness of voltage-correcting capacitors on two 12 kV distribution lines
Palmer, R.H.; Hackman, D.E.; Unger, M.W.; Oman, H.;
Transmission and Distribution Conference, 1991., Proceedings of the 1991 IEEE Power Engineering Society , 22-27 Sept. 1991
Pages:653 - 658