Iceland''s Renewable Energy System
As these stations thrived, they bolstered the nation''s renewable energy security and set a global example for harnessing the Earth''s natural
In terms of total energy supply, 85% of the total primary energy supply in Iceland is derived from domestically produced renewable energy sources. Geothermal energy provided about 65% of primary energy in 2016, the share of hydropower was 20%, and the share of fossil fuels (mainly oil products for the transport sector) was 15%.
As a result of rapid expansion in Iceland's energy intensive industry, the demand for electricity has increased considerably during the last decade. A licence issued by the National Energy Authority is required to construct and operate an electric power plant.
The first publicly connected solar power installation in Iceland is on the remote island of Grímsey, which has a 12 kW photovoltaic system installed in 2022. As of 2025, there are plans to install a solar power system paired with a battery storage system on another off-grid island, Flatey.
Iceland has relatively low insolation, due to the high latitude, thus limited solar power potential. The total yearly insolation is about 20% less than Paris, and half as much as Madrid, with very little in the winter.
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