I interpreted your comment as saying that hot water was piped directly into homes from a natural source, but I see now that you may not have meant that. There

I interpreted your comment as saying that hot water was piped directly into homes from a natural source, but I see now that you may not have meant that. There are exceptions, but generally hot water is piped directly into homes in Iceland from municipal heating. There's no domestic water heaters. There are dual hot & cold water pipes everywhere. The hot water that comes out of the tap is from the same source that's in the hot water radiators. In the case of Reykjavík the hot water is initially cold water heated at Nesjavellir[1] and at [2] you can see an article in Icelandic about the pipe. It's 27km of 80x90cm pipe that can transfer 1600 liters of 100 degree hot water per second. Here's the pipe on Street View: https://goo.gl/jFzvYN https://goo.gl/jFzvYN The reason they heat up cold water is simply because most of the time when you find an abundant natural heat source it doesn't also come with an abundant natural water source. Therefore you pump cold water in, mix it with the heat, and pump out hot water. I don't know what fancy technology they use for this at Nesjavellir, but in some rural areas this setup is literally just a coiled pipe dropped into a hot spring. 1. https://en.wikipedia.org/wiki/Nesjavellir_Geothermal_Power_Station https://en.wikipedia.org/wiki/Nesjavellir_Geothermal_Power_S... 2. http://www.verkis.is/verkefni/veitur/vatnsveitur/nesjavallaraed http://www.verkis.is/verkefni/veitur/vatnsveitur/nesjavallar...