What I'm trying to do is generate a PDF using Prawn, while having some language specific characters.

And as a result I'm getting the following error:

raise Prawn::Errors::IncompatibleStringEncoding,
   "Your document includes text that's not compatible with the  Windows-1252 character set.\n" \
   "If you need full UTF-8 support, use TTF fonts instead of PDF's built-in fonts\n."

So I tried changing the font by doing this:

# app/models/prawn/change_font_decorator.rb

Prawn::Document.generate("output.pdf") do
  font_families.update("Arial" => {
    :normal => Rails.root.join("app/assets/fonts/OpenSans-Regular.ttf"),
    :italic => Rails.root.join("app/assets/fonts/OpenSans-Regular.ttf"),
    :bold => Rails.root.join("app/assets/fonts/OpenSans-Regular.ttf"),
    :bold_italic => Rails.root.join("app/assets/fonts/OpenSans-Regular.ttf")
  })
  font "Arial"
end

Yet, I'm getting the same error when trying to generate a PDF file.

Any ideas on how to solve this?

The prawn manual is an excellent reference, and includes sections on font usage. The "External Fonts" section is particularly relevant to your issue.

Here's a basic case that should work, although it doesn't support bold and italic:

Prawn::Document.generate("output.pdf") do
  font Rails.root.join("app/assets/fonts/OpenSans-Regular.ttf")
  text "Euro €"
end

To also use bold and italic, it's best to register a font family that doesn't conflict with one of the standard PDF fonts:

Prawn::Document.generate("output.pdf") do
  font_families.update("OpenSans" => {
    :normal => Rails.root.join("app/assets/fonts/OpenSans-Regular.ttf"),
    :italic => Rails.root.join("app/assets/fonts/OpenSans-Regular.ttf"),
    :bold => Rails.root.join("app/assets/fonts/OpenSans-Regular.ttf"),
    :bold_italic => Rails.root.join("app/assets/fonts/OpenSans-Regular.ttf")
  })
  font "OpenSans"
  text "Euro €"
end

Where do I put the above code?

If you are inheriting from Prawn::Document you can try out the following:

class SpreeInvoicePdf < Prawn::Document
  require 'prawn'

  def initialize(quote, line_items)
    self.font_families.update("OpenSans" => {
                                :normal => Rails.root.join("vendor/assets/fonts/Open_Sans/OpenSans-Regular.ttf"),
                                :italic => Rails.root.join("vendor/assets/fonts/Open_Sans/OpenSans-Italic.ttf"),
                                :bold => Rails.root.join("vendor/assets/fonts/Open_Sans/OpenSans-Bold.ttf"),
                                :bold_italic => Rails.root.join("vendor/assets/fonts/Open_Sans/OpenSans-BoldItalic.ttf")
    })

    font "OpenSans"

  # etc.

You will of course need to go to Google fonts and download the fonts and place it in the vendor/assets/fonts/Open_Sans/ directory.