It is widely accepted that renewable energy sources are the key to a sustainable energy supply infrastructure since they are both inexhaustible and nonpolluting. A number of renewable energy technologies are now commercially available, the most notable being wind power, photovoltaic, solar thermal systems, biomass, and various forms of hydraulic power. In this paper, a methodology has been proposed for optimally allocating different types of renewable distributed generation (DG) units in the distribution system so as to minimize annual energy loss .The methodology is based on generating a probabilistic generation-load model that combines all possible operating conditions of the renewable DG units with their probabilities, hence accommodating this model in a deterministic planning problem. The planning problem is formulated as mixed integer nonlinear programming (MINLP), with an objective function for minimizing the system’s annual energy losses. The constraints include the voltage limits, the feeders’ capacity, the maximum penetration limit, and the discrete size of the available DG units. This proposed technique has been applied to a typical rural distribution system with different scenarios, including all possible combinations of the renewable DG units. The results show that a significant reduction in annual energy losses is achieved for all the proposed scenarios.