This manuscript presents a novel method for optimal placement of shunt capacitors in a power distribution network. Installing shunt capacitor banks to a distribution power system has been proven to have positive effects on power loss reduction, voltage regulation, power factor and the overall efficiency improvement. Leveraging convex optimization, the proposed technique minimizes the copper loss on the feeder, while achieving the desirable voltage regulation performance. Computer simulation results are summarized to prove the effectiveness of the method. This novel approach improves the existing capacitor placement methods by providing the optimality and flexibility to both regulate the voltage levels and reduce power losses.