Octopus Energy Generation is committing close to $1bn to California’s clean technology sector, expanding its presence in one of the world’s most advanced renewable energy markets and accelerating its push into next-generation climate solutions.

The UK-based investor said the capital would be deployed through its funds into a range of technologies, including carbon removal, industrial heat storage and solar generation with battery storage. The move builds on Octopus’s ambition to invest $2bn in the US energy transition by 2030.

A significant portion of the funding will back two California-based carbon removal companies focused on grassland restoration and reforestation. The businesses aim to rehabilitate degraded land and convert it into high-quality carbon sinks, with several large technology companies already lined up as buyers of the resulting carbon credits.

Octopus will also invest in heat battery technology developed in the San Francisco Bay Area, designed to help decarbonise industries that are difficult to electrify. The systems store renewable energy as heat, allowing manufacturers to replace fossil-fuel boilers with low-carbon alternatives — a growing area of interest as heavy industry comes under pressure to cut emissions.

In addition, the group will acquire a solar and battery storage project in California, seeking to capitalise on the state’s abundant sunshine to deliver low-cost clean power. The project is expected to become fully operational by July 2026.

The investment underscores the increasing convergence between the UK and California as global hubs for clean energy innovation. Britain’s clean energy economy grew three times faster than the wider economy in 2024, while California already employs more than half a million people in green industries and is generating over two-thirds of its electricity from clean sources. The state plans to reach 100 per cent clean power by 2045.

Zoisa North-Bond, chief executive of Octopus Energy Generation, said California offered a compelling environment for long-term investment. “With supportive policy and world-class entrepreneurship around Silicon Valley, it is an ideal place to back innovation that delivers growth, returns and real climate impact,” she said, adding that the investments would also benefit the UK economy.

The announcement follows a series of North American deals by Octopus, including investments in floating offshore wind developer Ocergy and solar assets in Ohio and Pennsylvania. Through its US retail arm, the group already supplies renewable electricity to thousands of homes in Texas.

The funding was announced during a visit by the Governor of California to Octopus’s London headquarters, highlighting the growing transatlantic ties in clean energy finance.