The paper deals with cost effective compensator placement and sizing. It becomes one of the most important problems in contemporary electrical networks, in which voltage and current waveform distortions increase year-by-year reaching or even exceeding limit values. The suppression of distortions could be carried out by means of three types of compensators, i.e., passive filters, active power filters and hybrid filters. So far, passive filters have been more popular mainly because of economic reasons, but active and hybrid filters have some advantages which should cause their wider application in the near future. Active power filter placement and sizing could be regarded as an optimization problem. A few objective functions have been proposed for this problem. In this paper we compare solutions obtained by means of combinatorial and genetic approaches. The theoretical discussion is followed by examples of active power filter placement and sizing.