This is typically done via tax rebates. An example would be this article below:

"This incentive is available for one year between 1 March 2023 and 29 February 2024. Individuals who install rooftop solar panel(s) can claim a rebate of 25% of the cost of the panels, up to a maximum of R15 000 per taxpayer. Taxpayers can use the solar tax rebate to reduce tax liability in the 2023/24 tax year"

https://www.sars.gov.za/faq/faq-what-is-the-sars-solar-tax-benefit/#:~:text=This%20incentive%20is%20available%20for,the%202023%2F24%20tax%20year.

There are already a great many such incentives, including government support for rooftop solar, electric cars, CO2 free energy production, tax o similar credits for wind and other renewables, government payments for renewable transportation fuels, 45Q tax credits, etc. You may be primarily asking what are the most effective economic incentives to provide. Here are a few thoughts, all of them probably controversial:

If you want to spread the societal cost across the most people, it probably makes more sense to establish a portfolio standard than a tax credit. Less than half of the US population pays any tax and many of those who do could not take advantage of most of the tax credits offered, so the population you are incentivizing is quite small. If you have a portfolio standard, the energy suppliers are obliged to meet the standard, which will generally increase their costs and all of our bills, but there are many more utility bill payers than there are taxpayers.

I have worked for over 40 years in the energy industry and would have to say that most incentives I have seen end up being hijacked by people who find ways to get the payment without accomplishing the goal of the incentive. Some of best outcomes have been the result of getting the broader marketplace engaged in meeting a non-corruptible goal. Examples of doing so were creating tradable pollution credits, where companies could either pay for the right to emit pollution (NOx for example) or could reduce their NOx emissions and sell a portion of that reduction to others. This was one of the most rapid and cost-effective pollution abatement programs we have ever had. It, like most things these days it seems, became politicized and has become victim of sloganeering by politicians, but it was and still is one of the most effective ways to address environmental issues. I believe the cost of NOx abatement decreased by about 90% when the problem shifted from compliance with prescribed technology to this market-driven approach.

One of the challenges with renewables is that the problem is so large and the effect of any one individual so small that most people become overwhelmed and think there is nothing they can do. If, instead of talking about the global problem, we focus on the portion of that problem attributable to an individual and what choices an individual can make people are more likely to change behavior . For example, most people who travel by air, especially intercontinentally, would be quite surprised to see how large air travel contributes to their personal CO2 emission. Similarly, in many cases energy conservation is both more cost effective and easier than other energy programs. For example, the incremental improvement in carpooling with just one other person is significantly larger than the improvement associated with expanding mass transit (though both are usually good moves). Finally, things like space heating/cooling and better local energy management make a large difference. There is no need to heat or cool areas when they are unoccupied for long time periods.

There a roughly three types: investment subsidies, feed in tariffs and a premium to the market price.

Investment subsidies give you a sum of money for building something, not for actually producing power. So if the subsidies are high compared to the financial return of selling power, there is little incentive to build efficient systems. It can even lead to systems being optimised for the subsidy: in the early days of wind energy in the Netherlands there was a subsidy on wind power capacity. What happened was that investors put extra large generators in the wind turbine to get more subsidy, but this made the wind turbines less efficient.

Feed in tariffs give you a fixed amount for each kWh you feed into the grid for a fixed amount of time, typically 20 years. This has several advantages over investment subsidies:

- It stimulates efficient systems and innovation, because the higher the power production the higher your profits.

- It provides predictability for investors. When you understand the local resource and the technology you can calculate if a project will be profitable.

At low grid penetration levels this has worked very well and the feed in tariff law in Germany (EEG) played a very important role in the technological development in stimulating technology development and the up scaling of PV systems manufacturing. At high penetration levels it becomes a disadvantage that producing at time of high demand is not stimulated.

A way to deal with this is not to pay a fixed tariff, but a premium on top of the market price. This stimulates the owners to produce at times of high demand and thus high market prices. It has the disadvantage that it provides less predictability for investors, because the long term development on the power market are hard to predict.

Whatever the type of incentive you choose, it is important to fine-tune the level of subsidy. If the subsidy is too low, nothing will happen. If it is too high you are wasting tax or rate payers money. Spain infamously set there feed in tariff for PV much too high resulting in a building boom, followed by a bust when it became clear how expensive the program was and the tariff was drastically reduced.

We are now at a stage where wind and solar power have become already quite competitive, and the question is more if these renewables need incentives at all. In many places it would be enough to remove subsidies on conventional power generation, remove bureaucratic hurdles and so on.

In addition to to my previous post:

Other financial incentives are cheap loans or reduced added value taxes, but these are in principle also investment subsidies.

Then you can put a surcharge on conventionally produced power to make the external costs, i.e. the cost of pollution to society, visible in the price.

And you can just straight out make the use of renewables compulsory. For example some German municipalities demand that new buildings include roof top PV, and in the EU there is a biofuel mandate that demands that a certain percentage of transport fuels consists of biofuel.