This paper proposes optimal total planning for incinerator plants (IPs) in a typical urban area, which includes a method of determining the number of plants and the capacities of the IPs. Burnable municipal refuse is disposed of sanitarily by high‐temperature incineration at the IPs. At the same time, power generation from waste (PGW) is being performed at many IPs to recover energy. At present, the amount of energy generated by PGW is greater than that of wind power or photovoltaic power generation. However, PGW has a limited generation efficiency and low generation output due to the smaller capacity of IPs. To overcome the above weakness, highly efficient PGW is necessary with total integration and scaling up of IPs. Regarding total integration and scaling up, operation in larger areas is favorable from the point of view of refuse volume and collection. In the planning stage, both the cost of IPs and refuse collection, which is important for refuse disposal, should be taken into account comprehensively. Optimal total planing for IPs can be performed in two stages. First, the disposal capacity G k of an IP versus the number of plants K is decided by constraints. G k is about the same for all K because of maintenance and refuse collection, and is greater than 300 tons per day in steps of 100 tons per day. G k should be decided not only by refuse volume but also by cessation of operation at plants due to maintenance or faults. Second, the cost of each value of K is calculated based on the construction and operating costs of the IPs, income from selling the energy of PGW, and refuse collection costs. Therefore, the value of K with the minimum cost is selected as the optimal number of IPs. A numerical simulation of an area with a population of 3 million indicates that the optimal plant number is 4. At present there are eight or nine IPs in cities of 3 million people. The above cost reduction effect will be about 15% from the present value. Considering the situation of aging IPs, a decreasing trend in refuse volume, and the stringent financial conditions of local governments, the proposed method is very effective and realistic.