In recent days, aiming for power generation with less carbon emission, led to the high penetration of renewable energy into the distribution grid. To improve the intermittency caused by renewables and to increase the grid flexibility, grid integrated Energy Storage Units (ESUs) are proposed as the promising solution in the literature. However, considering the investment cost, ESUs are optimally placed by satisfying the network electrical constraints. On the other hand, consideration of environmental impacts and other practical constraints are also equally important. Therefore, in this article, on top of grid performance parameters, realistic parameters that may affect the location and its size such as (1) environmental impact, (2) land requirement & its associated cost for ESU installation and (3) renewable purchase obligation are formulated in the objective function. Decision making on ESU installation is a planning activity, which follows uncertainty. Consequently, it is essential to model the uncertainty parameters into the objective function, for better planning. In this article, optimal planning of hybrid ESUs based on realistic parameters along with uncertainty is addressed. For this study, a practical 156-bus distribution system of Dehradun district, India is considered. From the results obtained, it is evident that, formulating hybrid ESU constrained with the environmental impact has significantly decreased the emission of CO2 with maximum grid stability. INDEX TERMS Batteries, distributed power generation, environmental economics, power system planning, sustainable development.