Electricity & gas in Iceland: your rights
The rules that protect you as an electricity and gas customer in Iceland, and who to contact. Every fact is checked on an official source.
What is going on?
Everything at a glance
The market
You can buy electricity from any supplier, wherever you live. Distribution is a local monopoly, so you cannot choose your distribution company. There is no household gas grid; many homes are heated by geothermal district heating (hitaveita), a separate utility.
Energy regulator
Raforkueftirlitið (Umhverfis- og orkustofnun)
Dispute resolution
Kærunefnd vöru- og þjónustukaupa · small fee
First try to settle the dispute with the seller. Filing costs ISK 5,000, refunded if you win in whole or in part. Breaches of electricity law can also be reported to Raforkueftirlitið.
Compare prices official
Verðsamanburður raforku (Orkusetur)
Switching supplier
Contact the supplier you want; it handles the switch for you. By law no fee may be charged for switching. You can end a contract with three weeks' notice, taking effect at the next month-end.
Price rises
The electricity trading rules set no specific notice period for price rises. You can always leave free of charge with three weeks' notice, effective at the next month-end.
Regulated price
There is no regulated or capped retail electricity price. Suppliers set their own prices; compare them on Orkusetur's price comparison.
Help if money is tight
No income-based social tariff. Owners or tenants without adequate geothermal heating can apply to Umhverfis- og orkustofnun for a state subsidy on electric heating, covering distribution and transmission costs up to 40,000 kWh a year.
Protection against cut-off
Only the distribution company may cut supply for unpaid bills, and only after the due date and a written warning sent 30 days in advance. It may charge fees for disconnection and reconnection.
If your supplier goes bust
There is no appointed supplier of last resort. If you have no valid contract, the distributor places you with the last supplier registered at your meter and warns you; if you sign no contract within 30 days, supply may be cut.
Power cut
Report power cuts to the distribution company for your area, not to your electricity seller. Only one distributor serves each place; the numbers below come from each distributor's own website (for Veitur its emergency number). RARIK and HS Veitur answer outside office hours on the same number; Norðurorka's electricity on-call line outside office hours is 892 1514. Distributors must pay compensation for prolonged interruptions; no fixed amounts are set in the rules.
Cooling-off period
For contracts made by phone, online or away from the seller's premises, you have 14 days to withdraw without giving a reason.
Smart meter
Distribution companies are replacing old meters with smart meters that send readings automatically; Veitur alone is installing about 160,000 for electricity, hot water and water. Whether households can refuse was not confirmed.
Free energy advice
Orkusetur, part of the state energy agency, offers free information and calculators on saving energy, heating, heat pumps and comparing electricity prices.
Energy sharing and communities
Icelandic law does not yet set up energy sharing or energy communities. A draft bill, in public consultation until 14 August 2026, would introduce energy communities, active consumers and peer-to-peer trading, so households could produce, store, use and sell renewable electricity alone or together.
- Today a small power plant owner can sell electricity to, or share surplus with, the distribution network only by separate agreement with the network owner and operator. (uos.is)
Heating without the gas grid
Many homes are heated by geothermal district heating (hitaveita). Each utility's tariff (gjaldskrá) must be confirmed by the minister under the Energy Act no. 58/1967 and published in the B section of Stjórnartíðindi, where you can look it up.
- Homes without access to geothermal heating mostly use electric heating; the state pays the full distribution and transmission cost of that electricity up to a set annual maximum. Apply online to Umhverfis- og orkustofnun. (uos.is)
Grants for heat pumps and insulation
Homeowners with subsidised direct electric heating who switch to an environmentally friendly source, such as a heat pump, can get a one-off grant (eingreiðsla) from Umhverfis- og orkustofnun: half the material cost excluding VAT, at most ISK 1,567,000.
- The grant is based on Act no. 78/2002 on subsidies for home heating costs and Regulation no. 698/2013. Apply through the form linked on the agency's page. (uos.is)
- Since 1 July 2023, owners of residential housing get 35% of the VAT on on-site labour for maintenance, renovation and new building refunded. You can apply up to six years after the work. (skatturinn.is)
Charging an electric car at home
In a multi-owner building, an owner may install EV charging at their own parking space, or a common space belonging to their flat, without the other owners' approval (Act no. 67/2020 amending the Multi-Owner Buildings Act).
- If you may use a shared, undivided car park, the owners' association must meet your request to install charging equipment there. (althingi.is)
- Equipment must measure each owner's electricity use unless clearly unnecessary, and a licensed electrician must do the electrical work. (althingi.is)
Back-billing and estimated bills
If a meter was wrong, either you or the distribution company can claim the difference for two years back; four years if the meter was read only every fourth year. Overpayments are refunded; for underpayments you get a reasonable time to pay.
- Meters without remote reading must be read at least every fourth year; in between the distribution company may estimate use from earlier consumption. It must bill you at least every three months (Regulation 1150/2019). (reglugerd.is)
Energy costs for tenants
Unless the lease clearly says otherwise, the tenant pays water, electricity and heating costs in the rented home. The landlord pays property taxes, insurance and meter rental fees charged by the utilities (Rental Act no. 36/1994).
- Disputes between tenant and landlord, for example about costs or rent increases, can be taken to Kærunefnd húsamála. (island.is)
Grid connection
The distribution company must connect everyone who meets the technical requirements and pays the connection fee in its published tariff. It may refuse only for reasons of capacity, safety or network quality, and must give the refusal in writing with reasons.