The invention discloses a method of reducing land occupation of a reactive compensation device layout. Reactive compensation devices are arranged in power distribution intervals of a transformer substation. Each active compensation device comprises a capacitor bank and a reactor group. At least one power distribution interval of one group of main transformers of the transformer substation is designed to be an interchange interval where not only the capacitor bank but also the reactor group can be arranged. During the operation process of the transformer substation, according to operation requirements, the capacitor bank and the reactor group are interchanged in the interchange interval. The method has the advantages that each group of main transformers can save an interval occupation of one low-voltage power distribution unit and reactive compensation equipment, occupation of four intervals can be saved if the number of groups of main transformers of the transformer substation is four, each group of main transformers can save one interval of switch equipment investment, and four intervals of switch equipment investment can be saved if the transformer substation is provided with four groups of main transformers.