Octopus Energy Generation invests $1 billion in California clean tech, expands U.S. energy footprint

California’s clean energy economy just pulled in another major foreign backer. Octopus Energy Generation is committing nearly $1 billion to California-based climate and energy projects, deepening its presence in the United States at a time when global capital is flowing into grid infrastructure, storage, and carbon markets.

The investment follows another major move by the company earlier this year. Less than two months ago, Octopus Energy spun off its software arm, Kraken, into a standalone business valued at $8.65 billion after a funding round led by D1 Capital Partners. The carve-out signaled that Octopus sees long-term value in separating its energy infrastructure assets from its software platform business.

The London-headquartered investor plans to back two carbon removal companies focused on grassland restoration and reforestation, fund heat battery technology developed in the Bay Area, and acquire a solar-plus-battery project in Southern California that is expected to come online by July 2026.

The announcement came during California Governor Gavin Newsom’s visit to Octopus’s headquarters in London, where he met with company executives and reviewed its smart energy platforms, including Electroverse, described as Europe’s largest public EV charging network. The visit coincides with a Memorandum of Understanding between the UK and California aimed at strengthening cooperation on clean energy innovation across the Atlantic.

Governor Newsom in conversation with Zoisa North-Bond, CEO at Octopus Energy Generation (Credit: Octopus Energy)

For Octopus, the California push fits into a broader U.S. strategy. The firm says it plans to deploy $2 billion into the American energy transition by 2030. This latest allocation accounts for roughly half of that target.

The carbon removal portion of the investment focuses on transforming degraded land into CO2-absorbing assets. According to the company, several large technology firms have already lined up to purchase carbon credits from these projects. Corporate demand for verified removal credits has been growing as major tech companies seek to offset hard-to-abate emissions.

Heat batteries represent another piece of the plan. The technology replaces fossil-fuel boilers with systems that store renewable energy as heat, targeting industrial processes that are difficult to electrify. Heavy industry remains one of the most stubborn sectors in decarbonization efforts, and investors have been seeking scalable alternatives to natural gas-based heating.

The solar-plus-storage acquisition adds a more conventional asset to the portfolio. California already generates more than two-thirds of its electricity from clean sources and aims to reach 100% by 2045. Storage has become central to that goal, particularly as solar output surges during the day and drops off in the evening.

Zoisa North-Bond, CEO at Octopus Energy Generation, said: “Octopus and California are both leading the way in clean energy innovation. With supportive policy and world-class entrepreneurship in and around Silicon Valley, it’s an ideal place to back long-term investment partnerships that will benefit the UK economy.

“We’re excited to expand Octopus internationally, backing the booming U.S. clean tech sector while bringing innovation, growth and returns to the UK.”

The move builds on Octopus’s earlier North American investments, including backing floating offshore wind company Ocergy and acquiring solar farms in Ohio and Pennsylvania. Through its U.S. retail business, the company already supplies green electricity to households in Texas.

Matt Davies, Founder and Director of Octopus Electroverse, explains how the platform simplifies electric vehicle (EV) charging across Europe and beyond. (Credit: Octopus Energy)

California’s clean energy sector now employs more than half a million people and has been adding green jobs at a pace that outstrips many other sectors in the state. Britain, for its part, reported that its clean energy economy grew three times faster than its overall economy in 2024.

Cross-border capital flows like this signal something larger than a single deal. Governments are signing cooperation agreements. Investors are writing billion-dollar checks. And climate infrastructure is increasingly treated as a core economic strategy, not a side initiative.

For Octopus, California offers scale, policy stability, and a deep bench of climate-focused startups. For California, the investment adds fresh capital from one of Europe’s largest renewable energy investors at a moment when storage, industrial heat, and carbon removal are moving from pilot projects to commercial deployment.

The energy transition is no longer confined to local grids. It is becoming a transatlantic capital race.