The move is designed to counter the higher price of developing wind farms on the remote islands of Orkney, Shetland and the Western Isles.
As the result of a campaign by locals and developers, the strike price will now be increased to £115/MWh compared with £100 on the mainland.
Davey said the price reflects the "unique circumstances and potential" of the islands.
The government anticipates that the proposed strike price will bring a "significant amount" of cost-effective generation to the Scottish Islands – with a prediction that 400MW of capacity will be in place by 2020, generating 1.5TWh per year.
A consultation on the proposal will be held over the next three weeks and, subject to a positive reaction, the island-specific strike price will be included in the first electricity market reform delivery plan to be finalised in December.
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