The New Local Government Network says planning laws should be relaxed to increase the take-up of green energy.
It also suggests local authorities could offer interest-free loans towards the cost of installation.
However, the Campaign to Protect Rural England says precious landscapes must be safeguarded.
The Government currently offers grants of up to 30 per cent towards the cost of installing wind turbines or solar panels and it is consulting on whether they should be permitted without planning permission where there would be minimal impact to neighbours.
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Finding the Energy, the New Local Government Network report says ministers need to allow councils to be even less restrictive.
James Macgregor, author of the report, said: "Listening to the voices of local people in this way would ensure that residential amenity was protected as defined by residents.
"Council tax rebates and capital loans for householders that install domestic microgeneration equipment would incentivise local people to engage in the process."
Chris Leslie, director of the New Local Government Network, told BBC Radio 4's Today programme that planning laws should be changed.
"The tests about whether, for instance, a wind turbine on somebody's house has a detrimental impact in a town should actually be left to the neighbourhood to decide themselves," he said.
"Let local people decide and they can be the ones regulating it, rather than a Whitehall piece of legislation that won't necessarily fit local circumstances."
The Campaign to Protect Rural England said it has no objection to using the planning system to encourage domestic renewable energy generation.
(JM/SP)
