An efficient heuristic algorithm is presented in this work in order to solve the optimal capacitor placement problem in radial distribution systems. The proposal uses the solution from the mathematical model after relaxing the integrality of the discrete variables as a strategy to identify the most attractive bus to add capacitors to each step of the heuristic algorithm. The relaxed mathematical model is a non-linear programming problem and is solved using a specialized interior point method. The algorithm still incorporates an additional strategy of local search that enables the finding of a group of quality solutions after small alterations in the optimization strategy. Proposed solution methodology has been implemented and tested in known electric systems getting a satisfactory outcome compared with metaheuristic methods. The tests carried out in electric systems known in specialized literature reveal the satisfactory outcome of the proposed algorithm compared with metaheuristic methods. © 2009 Elsevier Ltd. All rights reserved.