It Pays to Be Weird — Just Ask Iceland

"It pays to be weird" was the conclusion of a Danish doctoral thesis studying Iceland's remarkable success as a nation — not a slogan, a finding. A remote island of under 400,000 people turned its geography and its unique national identity into strength, and its energy story is another example of that: Iceland now gets roughly 90% of its energy from domestic renewable sources making it a global outlier.

Why it matters: Climate change isn't what drove Iceland's transition — at least not at first. Demand for affordable, reliable energy that didn't depend on anyone else did. And the 1973 oil shock that's usually credited with triggering the shift actually landed on a country that had already started laying the groundwork. Reykjavik's geothermal district heating buffered the capital from the worst of the price spike when the crisis hit. The shock didn't start Iceland's transition — it proved the case for one already underway and gave it the push to scale nationally.

Three transitions before this one

Iceland's energy system didn't leap from peat and dried sheep dung to geothermal in one move. The country's first geothermally heated home dates to 1908 — an individual project, not a system. Community-scale geothermal district heating began in Reykjavik in the 1930s and stayed a marginal technology for decades while the country, like most of the world, built its system around imported fuel: coal supplied 85% of Iceland's energy by the end of the Second World War, and oil had taken over most of that share by the mid-1960s. What's easy to miss is a much earlier decision that shaped everything after it: Iceland passed legislation early in the 20th century to keep domestic energy resources working for national benefit rather than private or foreign interests which continues to inform energy decision making today.

A crisis that rewarded work already done

When oil-producing nations restricted exports in 1973 and 1979, prices soared and Western economies dependent on imported fuel went into rationing and recession. Iceland felt it too. But Reykjavik's residents were already partly insulated, because the city's geothermal heating network was already running. Other municipalities took note and moved fast: partnering with local entrepreneurs and drawing on national geothermal research programs and new legal frameworks that made it easy for homeowners to connect to growing district heating networks. Within about a decade, oil's share of Iceland's space heating fell from 57% to 7% — mostly through systems municipalities owned and financed themselves with national support behind them.

Built bottom-up, sold with before-and-after photos

None of this was a central government mandate. It was self-organizing farmers who understood the land and local entrepreneurs and municipal governments — already experienced at harnessing local renewable energy for public benefit — who co-created the path, with national programs backing what was already working. Iceland isn't done, either — a 2020 national policy launched, the country’s fourth energy transition, aiming to become a "land of clean energy" built around energy security, the renewable shift, efficiency, environmental protection, and social and economic benefit.

What this means for Canadian communities

Canadian towns and cities aren't islands, but energy still arrives in a similar way — not on a boat, but over transmission lines, through pipelines, and on tanker trucks. Every dollar of that is a dollar a community did not generate or save itself.

Cutting demand in buildings and transportation lowers costs and improves affordability:  every $1 invested in energy efficiency delivers an estimated $4 to $7 increase in GDP. Harnessing local renewables adds the other half of Iceland's formula — it's already happening in Saskatoon and Calgary, where rooftop solar is displacing electricity generated from fossil gas and coal, and in remote Indigenous communities replacing imported diesel generation with renewables they own.

The bottom line: Iceland's transition wasn't a national blueprint handed down from Reykjavik — it was farmers, entrepreneurs, and municipalities, who would not stay dependent on someone else's fuel, and did the work in the margins until the rest of the country caught up. That's not a uniquely Icelandic instinct. It's available to any Canadian community willing to act a little weird.