This article suggests a bi‐stage methodology for optimal allocation of static VAR compensating (SVC) systems in integration with fixed capacitors (FCs) and distributed energy resources (DERs). The proposed methodology is based on an improved Grey Wolf algorithm (IGWA). Multifarious objectives are comprised to minimize the investment costs of the new devices installation, the costs of the power generation from the grid, the active power losses, the system voltage deviations, and to enhance the power transfer capability through minimizing the load balancing index. These disparate objectives are incorporated together and handled based on IGWA by merging simultaneously various daily loadings through light, intermediate and nominal load levels. The proposed methodology is applied on two various topologies of real‐world grids belong to the Egyptian electrical unified network. The simulation results demonstrate noticeable technical and economical features with eminent capabilities of the utilized algorithm. The compensation of the reactive power via SVCs based on the proposed methodology leads to significant improvement in the whole quality of the nodes voltage with the load variations. In light loading conditions, the SVCs regulate their output, in an optimal way, in according to the reactive power requirements in the neighboring nodes and they help in relieving the negative impacts of nodes overvoltage due to the DERs and FCs that may be existed.