Due to global environmental regulations and policies with rapid advancement of renewable energy technologies, the development type of renewable energy sources (RES) in power systems is expanding from small-scale distributed generation to large-scale grid-connected systems. In the near future, it is expected that RES achieves grid parity which means the equilibrium point where the power cost of RES is equal to the power costs of conventional generators. However, although RES would achieve the grid parity, the cost related with development of large-scale RES is still a big burden. Furthermore, it is hard to determine a suitable capacity of RES because of their output characteristics affected by locations and weather effects. Therefore, to determine an optimal capacity for RES becomes an important decision-making problem. This study proposes a method for determining an optimal installed capacity of RES from the business viewpoint of an independent power plant (IPP). In order to verify the proposed method, we have performed case studies on real power system in Incheon and Shiheung areas, South Korea.