Start off slowly. To be good at playing fast you need accuracy. Develop your picking and fretting accuracy by working on licks slowly to begin with. Playing them slowly will highlight any flaws in your technique. Bum notes or scuffed picking will be disguised at high speed so work on your licks at half speed. Use a metronome or click track to monitor your progress and increase the speed of your practice licks by 5 beats per minute each day.
Improve economy of movement. To play blisteringly fast guitar licks there is no room for over exaggerated picking or fingering. All of the movement should come from your wrist, never your arm. Alternate picking is a great way of getting two notes for the effort of one. Whenever you use a down stroke to hit a note use the upstroke to strike the next note. Using only down strokes halves the amount of notes you can hit in one movement.
Develop your tremolo picking technique. Tremolo picking is a fundamental technique for fast guitar licks. Tremolo picking is essentially striking the string as fast as possible. Practice by playing an open top E string and aim for even, consistent strokes. Play to a metronome and increase the speed each day. Once your right hand technique is consistent, introduce note changes by fretting with your left hand.
Incorporate hammer ons and pull offs. These are great short cuts for playing fast guitar licks. A hammer on involves fretting a note without striking the string. Practice by striking the top E string and hammering on to the second fret with your second finger. You only pick the note once, the force of the hammer creates the second note. You get two notes for the pick movement of one. A pull off is the reverse of this technique where you begin with a fretted note and quickly release the fretted note so that the open string sounds without being struck.
Emulate the best. Once your basic techniques for fast guitar licks is improving at a good rate, listen to some fast players. Marty Friedman from Megadeth, John Petrucci from Dream Theatre and solo composer Yngwie Malmsteen are all super fast players. Attempt to emulate some of their riffs to understand the structure and detail of their ideas.
Build your own riffs to play fast. Select five or six notes and establish a pattern in which to play them. Repeat certain notes for extra intensity. Incorporate hammers, pulls and speed picking to enable you to play the riff fast.