Domestic energy prices in Iceland vary drastically based on where you live, with 138 percent difference between the cheapest and the most expensive.
The biggest difference comes between parts of the country which heat their water with electricity and the parts blessed with geothermal heat. Some people pay as little as ISK 85,000 (EUR 572/USD 636) to heat their homes for a whole year, while others pay more than ISK 200,000 (EUR 1,345/USD 1,495).
The National Energy Authority has costed out annual energy requirements for the same fictional “average” home in several different towns and countryside locations. Its findings were that heat and general electric costs are higher in rural areas than in towns, and higher in some regions of the country than others, RÚV reported. But where does the difference come from and is it possible to cancel it out?
Benedikt Guðmundsson, project manager with the Energy Authority, said in an interview that some parts of the country are generally warmer than others, and that hot water is delivered to homes at varying temperatures, which means different amounts can be needed for the same effect. As home heating costs are measured in cubic meters of water used, instead of by actual energy used as with electricity, then this can make a big difference. “I have long believed that all heating costs should have a so-called energy meter so that people are really paying for the energy they receive into their homes,” Benedikt says.
There is also a big difference in the amount of tax paid on electricity and on hot water for heating.
Benedikt says subsidies are increasing, especially on distribution, which helps level prices across the country, but adds that the retail end of the distribution to customers cannot be subsidized.