This is a good debate and just to add to a couple of points already made.
Iceland does indeed have natural geothermal resources in abundance. So much so that it is able to heat parts of the road system in remote areas. This is usually limited to sloped sections of the roads where accidents have the most risk.
With regard to incentives to encourage people to use renewable energy, this already exists can can be quite lucrative.
I have solar thermal panels and ground source heating and I have been in regular receipt of RHI (renewable heat incentive) from the Govt for many years which is very generous. This continues in perpetuity long after the capital costs of installing the equipment have been paid off. In fact it will continue with anyone who purchases my house should I wish to sell it.
I'm surprised the Govt hasn't removed that last benefit because it does seem uneccessary.
I was mindful at the time that I installed my renewable energy that successive Govts might remove the RHI payments so it was a risk but they haven't done so.
I suspect that because there's so few households with renewables the Govt is still able to afford it