In a medium saucepan, bring 4 cups of water and 1 teaspoon of salt to a boil. Slowly whisk in the grits and reduce the heat to low. Cook for about 20-25 minutes, stirring occasionally, until the grits are thick and creamy. Stir in the cheddar cheese and butter until melted and well combined. Remove from heat and keep warm.
In a large skillet over medium heat, cook the chopped bacon until crispy. Remove the bacon and set aside, leaving the drippings in the skillet.
In the same skillet, add olive oil and heat. Add the minced garlic and sauté for about 30 seconds until fragrant. Add the shrimp, paprika, cayenne pepper (if using), and season with salt and pepper. Cook for 3-4 minutes, or until the shrimp are pink and opaque.
Stir in the lemon juice and cooked bacon, mixing well. Remove from heat.
To serve, spoon a generous portion of grits onto each plate and top with the shrimp mixture. Garnish with chopped green onions.