A win-win situation for distributed power generators and distribution network companies is an important guarantee to promote the implementation of energy strategies. This paper proposes a distributed power generation bi-level planning method that takes into account the power outage loss of the distribution network. Based on the DG candidate installation location determined by the network loss sensitivity method, the upper model aims at maximizing the revenue of DG generators, and optimizes the location and capacity of DG. The lower level model aims to maximize the net income of the distribution network company. It uses the island division method to dynamically optimize the installation position of the sectionalized switch, reduce the outage loss of the distribution network, and realize the optimal configuration of the reactive power compensation device. The genetic model was used to solve the above model, and the simulation analysis was performed through an IEEE 33 node example. The results show that the model and method can reduce the power outage loss of the distribution network while promoting DG dissipation, and achieve a win-win situation for both parties.