DECC will constitute a steering group to address concerns on progress of renewable energy projects besides providing £20m in funding for research & development in carbon capture and storage.
The department will also formulate a £5m competition to ascertain the most innovative local authority or third sector collective purchasing/switching initiative.
UK Energy and Climate Change Secretary Edward Davey remarked that the Scottish islands had a lot of potential for tidal, wind and wave renewable resources.
"I recognize there are concerns about the speed of progress of renewable projects on the Islands. That is why I am today commissioning, in conjunction with the Scottish Government, a new Steering Group that will inform a new independent study on Scottish Island Renewable Generation.
"This study will assess the commercial viability of renewable projects on the Scottish Islands and the overall value for money these projects provide for the UK.
"I have been very impressed with the wind and marine developments I’ve seen this week during my visits to Shetland and Orkney and it is important everything is being done to speed up progress where possible," said Davey.
Scottish Energy Minister Fergus Ewing added, "We will continue to work with the current industry-led panel on charging, which may deliver some reductions in the scale of charges faced by both mainland and island generators in Scotland."
