Energy secretary Ed Davey promised the consultation earlier in the year after winning a battle with the Treasury to reduce the renewable obligation certificates (ROC) for onshore wind by 10% from April next year rather than the 25% reportedly sought by the chancellor George Osborne.
A second element of the consultation will examine the overall costs of generating electricity from onshore wind. If the outcome of this shows a significant change in the cost of electricity from onshore wind, the government could reduce the ROC level from 2014 as it is only guaranteed for a year.
Wind developers in the UK already pay on average £1000 per megawatt they install towards community projects in the areas affected by wind farms.
The consultation will look at how these benefits could be increased, for example through reduced electricity bills. One model that will be examined is the Community Benefits Register launched last week in Scotland, which allows residents to compare the benefits being paid for different projects around the country.
"This new call for evidence will look at ways to reward host communities and ensure that wider investment, employment and social benefits are felt locally," Davey said.