Renewable energy systems (RES) are becoming a strong component of local sustainable innovation strategies. Using a policy mix perspective, this paper investigates innovation policy criteria from municipalities’ locational factors, cooperation activities among stakeholders, and local knowledge about RES as antecedents to see how they leverage the development of local RES. We studied these antecedents at a local level by analyzing a sample of 727 middle and large German municipalities using instrumental variables regression. Our results indicate that policymakers should focus on building local knowledge related to RES for local actors and with enhancing public-private cooperation activities. However, we did not find that locational factors such as direct incentives and energy and emissions reductions have a direct impact on RES. We suggest that these locational factors can provide indirect support for RES, as a starting point for the implementation of other policy criteria which we investigated in our study. Our findings also indicate greater RES development potential when policymakers adopt a facilitator role and support local innovation networks among different actors rather than keeping RES development activities within the municipality itself. In such an innovation network, stakeholders from non-municipality public and private institutions offer additional support to develop a local RES.