In the guild tradition, an apprentice becomes a journeyman after seven years & strikes out on his or her own to work with other masters until, one day, he (traditionally) makes a “masterpiece” & presents it to the guild to show he’s mastered the art & deserves to be accepted as a master craftsman. Make your wizards do that.

Create an advantage for arcane spellcasters of all sorts to be accepted as masters of the arcane arts. Then at, say, 5th or 7th level, make it a requirement that the player invent a new spell of a level their character can cast. You might say single-class wizards get the opportunity earlier than half-casters and others (sorcerers and warlocks in D&D).

The Advantage

The advantage to the character to be considered a master should include:

• Access to high-level archwizards and more wizened sages. This might mean getting to choose any spell to learn instead of being able to learn only those they find or recover from foes. (You don’t let them just browse the core rules and supplements like Christmas catalogs, right?) Such high-level NPCs should be less willing to talk with ordinary journeymen wizards and happier to engage with masters. And they should be confident about telling masters about more dangerous adventures where greater treasures await.
• Access to lords and nobles. Such characters have bigger problems to solve than the usual merchants and town officials that a low-level party has access to, and that means bigger rewards. They don’t want to hire Boozy Jack Tankard and his magician pal Kenny; they want Sir Jonn Tankard and master wizard Kenithar (a reason to also implement knighthood).
• Generally more favorable reactions from other NPCs, particularly town bailiffs and constables, city mayors, and county sheriffs and judges.

The Masterpiece

The spell must, of course, be similar to other spells in the game in certain ways….

Character

The spell needs to avoid infringing on other character classes’ features. Wizards can’t cast healing spells or transform into a sword-wielding fighter.

They also can’t have special meta-effects, like giving the caster back expended spell slots or eliminating the concentration requirement of another spell.

Specificity

The new spell must be specific in its game effects, not just mechanical effects. It can’t just do bludgeoning damage. It has to “create a sudden storm of fist-sized hail that does bludgeoning damage.” It can’t just give the target immunity from mundane weapon damage. It has to “cloak the target in a swirling mist that hardens the instant a mundane weapon touches it, causing it to bounce off.”

And it can’t combine several different effects, such as giving the target an armor class bonus and advantage on all skill and ability checks and the ability to fly.

And it can’t just be an alteration or “improvement” on an existing spell. You can’t create Fireball but Smaller–so it can be 2nd level–and expect the guild to be impressed.

Power

The new spell has to match the power of other spells of the same level (whatever level you determine). You might say they can create a spell of any level they can cast, but I would limit it a little. It makes sense to say you can’t create the type of spell you’ve only recently learned how to cast, so say a 5th-level wizard can create 1st- and 2nd-level spells, & a 7th-level wizard 1st-3rd. After all, being able to play complicated songs on a guitar doesn’t mean you can write complicated songs, but you can probably write simple songs.

If it disables an opponent or does damage, it needs to be limited in its range & area of effect like other spells of the same sort. Err on the side of caution here. You don’t want to wreck your campaign by letting a PC cast a spell so powerful that it becomes their go-to spell in every situation. And the obvious thing that players will do is try to create a spell that solves some common problem they encounter in the adventures you serve them, so by definition it’s an exercise that will endanger your campaign.

You should also take a firm hand in deciding the verbal, somatic, & material components to ensure they’re comparable to other spells.