Currently, China is facing severe pressure of environmental emission reduction. As a kind of clean energy, waste-to-energy technology has the advantages of renewability, low pollution, and stable supply. To establish an affordable, effective, and sustainable waste disposable method is critical for the low carbon society transition. Therefore, the innovation diffusion of waste incineration power technology is a problem worth studying. Based on this, in order to answer this question scientifically, this paper constructs a system dynamics model of innovative diffusion, and analyzes the internal mechanism of innovation diffusion. The results show that firstly, the government support policies have a positive influence on the innovation and diffusion of waste incineration power technology; secondly, compared with the R&D policy, feed-in tariffs policy is more efficient to expand the installed capacity of waste incineration power; At last, technological innovation caused by government support policies is the main driving force of waste incineration power industry investment cost reduction.