This paper aims to determine the optimum locations for renewable energy sources (RES), specifically photovoltaic (PV) power plants, based on two indices: line stability index and voltage stability index. The analysis comprises power flow analysis, short circuit analysis, and power quality analysis. The effectiveness of the method is demonstrated with the IEEE-9 bus network and a real system (new delta substations) consisting of 18 substations, considering various scenarios involving changes in the penetration levels (PLs) of PV power plants and the substitution of centralized units with distributed units. The optimum locations and PLs are selected that minimize the active and reactive power losses, enhance the system's voltage profile, and guarantee adherence to power quality specifications, which include keeping the voltage and current harmonic distortion within predetermined limits. This investigation employs DIgSILENT Power Factory as a software tool that enables all necessary analyses and investigations on the grid. Finally, this article offers a variety of methods for reducing harmonic distortion, which helps to keep voltage and current distortion within acceptable limits. The results are thoroughly analyzed and presented in comparative form.