This paper proposes the allocation method for capacitor-reactor banks in a distribution system with dispersed generators to reduce the installation costs, the maintenance costs and minimize the loss of electrical energy. The expected lifetime and maintenance period of devices with moving parts depends on the total number of operations, which affects the replacement and maintenance period for aging equipment under a limited budget. In this paper, the expected device lifetimes and the maintenance period are included in the formulation, and the optimal operation status of the devices is determined using a genetic algorithm. The optimal numbers and locations for capacitor-reactor banks are determined based on the optimal operation status. Simulation results in a 69-bus distribution system with the dispersed generator show that the proposed technique performs better than conventional methods.