The efficiency and production costs of solar panels have improved dramatically in the past decades. The Nordic countries have taken steps in instigating photovoltaic (PV) systems into energy production despite limited incoming solar radiation in winter. IKEA installed the first major PV system in Iceland with 65 solar panels with 17.55 kW of production capacity in the summer of 2018. The purpose of this research was to assess the feasibility of PV systems in Reykjavík based on solar irradiation measurements, energy production of a PV array located at IKEA and theory. Results suggests that net irradiation in Reykjavík (64°N, 21° V) was on average about 780 kWh/m2 per year (based on years 2008-2018), highest 140 kWh/m2 in July and lowest 1,8 kWh/m2 in December. Maximum annual solar power is generated by solar panels installed at a 40° fixed angle. PV panels at a lower angle produce more energy during summer. Conversely, higher angles maximize production in the winter. The PV system produced over 12 MWh over a one-year period and annual specific yield was 712 kWh/kW and performance ratio 69% which is about 10% lower than in similar studies in cold climates. That difference can be explained by snow cover, shadow falling on the panels and panels not being fixed at optimal slope. Payback time for the IKEA PV system was calculated 24 years which considers low electricity prices in Reykjavik and unforeseen high installation costs. Solar energy could be a feasible option in the future if production- and installation costs were to decrease and if the solar PV output could be sold to the electric grid in Iceland.