How to allow standard user to install software in Sierra?

There isn't really a way you can do this. Installing an application could involve running a PKG file which will require user authorisation to write files to the Applications folder and the Library. Otherwise it could be drag-and-drop to the Applications folder, but that in itself will still require administrator credentials as the folder is technically owned by user root.

Basically what you're asking for may seem simple, but there's no real way for macOS to distinguish what you need. As far as it's concerned, a system change is a system change, and you'll need Administrator privileges to make those chances.

As with everything, there is likely a way around this, but it will involve a stocking full of Terminal commands and it's just asking for trouble.