The move, subject to state-aid approval, will see onshore wind sites located on islands, such as Orkney and Shetland, compete with "less-established technologies", such as offshore wind sites, in any forthcoming CfD round, slated to be in spring 2019.
Under the consultation, the government is also looking to determine an administrative strike price — or maximum bid price — for the island projects.
The UK government said due to the difficult logistics and transmission requirements of these projects, the costs are higher, which differentiates them from mainland onshore sites.
Currently the government proposal defines remote island wind projects as being "located in the territorial sea of the United Kingdom, other than the part adjacent to Northern Ireland" and "where all parts of its coastline are situated at least 10km from mainland Great Britain".
To qualify as a remote island CfD candidate, the projects must include a "connection between the unit's generation circuit and the Main Interconnected Transmission System (MITS) [that] requires at least 50km of cabling, of which 20km must be subsea cabling".
Projects in these areas could help stimulate the local economy, by boosting employment and supply chain opportunities, the government said.
UK minister for Scotland, Lord Duncan, said: "Wind projects in the remote islands of Scotland have the potential to generate substantial amounts of electricity and cut emissions, supporting economic growth and delivering lasting benefits for communities.
"Enabling these projects to compete in future auctions will reinforce the UK's position as a world leader in renewable generation, as well as providing Scottish jobs in any projects supported."
The government quoted a 2013 report, which stated Scottish Islands had the potential wind capacity to provide up to 3% of the UK's total electricity demand, due to the locations' higher wind resources.
According to the government's consultation, as well as the Scottish isles, other remote islands that could be included are the Isles of Scilly, off southwest England, and Holy Island, off northwest Wales. The consultation runs until 9 March 2018.
Up to £557m (€663m) has been put aside for further CfD auctions in the UK. The latest round, awarded in September 2017, supported three offshore wind projects, at an average price of £66/MWh (€75/MWh).
Onshore wind projects were excluded from the second auction, after the UK's ruling Conservative Party barred them from competing.
However, in recent months, there have been moves to show the government is softening its stance on onshore wind.
Although development of onshore sites in England remains unlikely, projects in Scotland and Wales could be given access to the next round.