Subsequent Refresh fail after Initial Refresh for reports with Incremental Refresh

I have reports in a premium capacity workspace that fail in subsequent refreshes after a successful initial refresh. 

These reports failed initially when trying to have a full dataset refresh. Hence, we decided to implement Incremental Refresh. 

The initial refresh was successful. However, the subsequent scheduled refreshes fail because of memory capacity issues. 

The refresh policy in place is to archive 2 years of data and refresh every day last 1 day of data.

I am trying to understand the possible reasons for this issue here.