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Deep Sky is running a carbon removal competition on the plains of Alberta.

Four years ago, Congress hatched an ambitious, bipartisan plan for the United States to become the epicenter of a new climate change-fighting industry. Like an idea ripped from science fiction, the government committed $3.5 billion to develop hulking steel complexes equipped with industrial fans that would filter planet-warming carbon dioxide out of the air.
That vision — to build regional hubs for “direct air capture” — is now languishing under the Trump administration. But a similar, albeit privately-funded initiative in Canada has raced ahead. In the span of about 12 months, a startup called Deep Sky transformed a vacant five-acre lot in Central Alberta into an operational testing ground for five different prototypes of the technology, with more on the way.
I had been following the project since early last year, after receiving roughly a dozen press releases from Deep Sky about all of the companies it was setting up partnerships with. But it was hard to believe the scope of the ambition until I saw it with my own eyes.
CarbonCapture Inc., one of the companies piloting its technology at Deep Sky, had originally planned to deploy in the U.S., but has since packed up and headed north. The Los Angeles-based startup recently shipped all the equipment for its first demonstration project from Arizona to the Deep Sky site on four flatbed trucks. On a crisp October day, under a bluebird sky, the company’s CEO Adrian Corless stood in front of the newly installed towering mass of metal fans and explained the move.
“Because of what’s been going on in the U.S. and the backing away from support of climate technology and carbon removal, we made a decision back in February that we were going to redirect our focus and effort to Canada,” he told an audience of Canadian officials who had come to see the tech up close.
“Eight weeks ago, this was just dirt,” Corless said. “Today, we’re actually going to bring the first of our modules to life.” Then he invited Danielle Smith, Alberta’s conservative Premier, to do the honors. She pointed her fingers like a pistol and yelled, “Hit it!”
Behind her, the fans started to whir.
Deep Sky is not like other companies working in direct air capture, or DAC. Whereas most startups are developing their own patented designs and then raising money to go out and build demonstrations, Deep Sky is solely a project developer. It buys DAC systems, operates them, and sells credits based on the amount of carbon it’s able to remove from the air and sequester underground. Other companies buy these credits to offset their own emissions.
In the spring of 2024, Damien Steel, Deep Sky’s then-CEO, explained the theory of the case to me. It takes a different set of skills to engineer the tech than to deploy it in the real world, he said, which requires procuring energy to run the system and developing storage sites for the captured CO2. “There’s a reason why renewable developers don’t build their own windmills and solar panels,” he told me.
DAC technology is nowhere near as advanced as solar panels or wind turbines. Removing carbon dioxide from the air, where it makes up just 0.04% of the total volume, is currently far too energy-intensive to be commercially viable. There are more than 100 companies around the world trying to crack it.
Deep Sky’s first ambition was to buy a bunch of prototypes, test them next to each other, and figure out which were the most promising. Steel told me he was in the process of acquiring 10 unique DAC systems to install at a “commercialization and innovation center” known as Deep Sky Labs.

By the end of that summer, the company had signed a lease for the site in Alberta. Less than a year later, this past June, it had completed initial construction and was ready to begin hooking up DAC systems. In August, it announced that it had successfully injected its first captured carbon into an underground storage well. I had never seen one DAC project in the real world, let alone five. The company suggested I come for a tour during CarbonCapture’s launch event in late October.
By then Steel, who joined Deep Sky after more than a decade in venture capital, had stepped down from the CEO role “for personal reasons,” he wrote in a LinkedIn post, though he stayed on as an advisor. My guide would be his successor, former Chief Operating Officer Alex Petre.
Deep Sky Labs, now called Deep Sky Alpha, is in Innisfail, a town of about 8,000 people surrounded by farmland and prairie. To get there, I flew to Calgary and drove 75 miles north on Highway 2, the primary throughway that connects to Edmonton. Innisfail is dense and suburban-looking, with an industrial corridor on the western edge of town. Deep Sky was on its outermost edge, on the site of a former sewage lagoon the town had recently reclaimed, and sat catty corner to a welding and manufacturing company, which, as I was later told — multiple times — was developing hydrogen-powered locomotives.
A bright white cylindrical building about the size of an airplane hangar, emblazoned with “Deep Sky” in big black letters, was visible from half a mile away. As I pulled up to the site, workers in neon vests and hard hats were scurrying among outcroppings of pipes and metal structures. Unsure of where to enter, I parked on the road and wandered up to some trailers outside the perimeter. Petre poked her head out of one and beckoned me inside an office, where she fitted me with my own vest and hard hat so I could get a closer look.
“This is the only place in the world where we are putting together different direct air capture technologies side by side,” she told me, as we passed through a gate and began walking the grounds. Other than the sound of trucks and excavators driving around, it was fairly quiet. None of the DAC units were operating that day — one was down for maintenance, one for the winter, and the rest were still under construction.
The first stop on the tour was a modest black shipping container labeled SkyRenu, a DAC company based in Quebec. It was the smallest system there, designed to capture just 50 tons of carbon per year — roughly the annual emissions from a dozen cars. Directly across from it, workers appeared to be fitting some pipe on a much larger and more complicated structure resembling Paris’ Pompidou Center. This was United Kingdom-based AirHive’s system, which would have the capacity to capture about 1,000 tons per year once completed.

DAC systems are feats of chemistry and mechanical engineering. At their core is a special material called a sorbent, a liquid or solid designed to attract carbon dioxide molecules like a magnet. The process is generally as follows:. First, the sorbent is exposed to the air, often with the help of fans. Once saturated with carbon, the sorbent is heated or zapped with electricity to pry loose the CO2. The resulting pure CO2 gas then gets piped to a processing facility, where it’s prepared for its ultimate destination, whether that’s a product like cement or fuel or, in the case of Deep Sky, a deep underground rock formation where it will be stored permanently.
Deep Sky’s aim was to trial as many iterations of the tech as it could at Alpha, Petre told me. That’s because what works best in Alberta’s climate won’t necessarily be optimal in Quebec or British Columbia, let alone hotter, more humid zones. “When the feedstock, which is ambient air, ends up being so different, we need multiple different technologies to work,” she said.
Case in point: A DAC system designed by Mission Zero, another U.K company, was offline the day I visited — and would remain so until next spring. It utilized a liquid sorbent and had to be drained so that the sorbent wouldn’t freeze when temperatures dropped below freezing overnight. The challenge wasn’t entirely unique to Mission Zero, however. “Everyone is struggling with winter,” Petre told me.

Alpha is piloting systems with liquid sorbents and solid sorbents, variations on the chemistry within each of those, and systems that use different processes to release the carbon after the fact. The development cost ran to “over $50 million” Canadian, Petre told me. The company raised about that amount in a Series A back in 2023. It also won a $40 million grant from Bill Gates’ venture capital firm Breakthrough Energy in December 2024, and this past June, the Province of Alberta awarded Deep Sky an additional $5 million from an emissions-reduction fund paid for by fees on the fossil fuel industry.
The company fully owns and operates almost all of the DAC units onsite, although it’s still working with the vendors to troubleshoot issues and sharing data with them to improve performance.
When it comes to Carbon Capture Inc., however, the arrangement is a bit different. Deep Sky has agreed to host the company’s tech, giving it access to power, water, and underground CO2 storage, but CarbonCapture will retain ownership and help with operations, and the two companies will share the proceeds from any revenue the unit generates.
Petre said the structure was mutually beneficial — Deep Sky gets to demonstrate its strengths as a full-service site developer, while CarbonCapture gets access to a plug-and-play spot to pilot its system in the real world. The U.S. company is also looking to expand in Canada. “There’s lots of potential collaboration down the line,” Petre said.
Before Trump arrived at the White House, CarbonCapture had been making aggressive plans to grow in the states. In the fall of 2022, before the company had even demonstrated its tech outside of a lab, it announced that it would build a project capable of removing 5 million tons of carbon per year in Wyoming by 2030. It later leased an 83,000-square-foot manufacturing facility in Arizona to produce the equipment for the project.
At the time, the Biden administration was integrating carbon removal — of which DAC is just one variety — into its “whole-of-governement” climate strategy. The Department of Energy rebranded its Office of Fossil Energy to reflect a new focus on “carbon management,” a broad term that encompasses carbon captured at fossil fuel plants as well as from the atmosphere. In addition to overseeing the development of the DAC Hubs, the agency was running more than a dozen other grant programs and research initiatives mandated by Congress that were intended to help the nascent industry get established in the U.S. Biden’s 2022 climate law, the Inflation Reduction Act, also increased the tax credit available to DAC projects from $50 for every ton of carbon stored underground to $180.
As helpful as all of that may have been for the nascent industry, Canada was arguably going further. In 2022, the country finalized its own tax credit — an investment tax credit — that would cover 60% of the capital cost of building a direct air capture plant. The approach, while inspired by the U.S. subsidy, is geared more at de-risking project development than rewarding project success. The following year, the province of Alberta said it would offer an additional 12% investment tax credit on top of that.
Alberta was also becoming a leader in developing carbon storage infrastructure. Despite — or, more likely, because of — its oil-based economy, the province views carbon capture and storage as a “necessary pathway” that “will help Alberta transition to a low-carbon future.” Canada is the fourth largest producer of crude oil in the world, and the bulk of it comes from Alberta’s environmentally destructive tar sands.

The government of Alberta owns most of the subsurface rights there, unlike in the U.S., where such rights are bestowed to landowners. That meant the province could simply offer companies leases to develop carbon injection wells. After two requests for proposals, the province selected 24 projects to “begin exploring how to safely develop carbon storage hubs.” A few of them, including Deep Sky’s storage partner — the Meadowbrook Hub Project north of Edmonton — are now operating.
Corless, of CarbonCapture, told me he spent a lot of time in Washington talking to the new staff at the DOE after Trump’s inauguration. It became increasingly clear to him that the DAC Hubs funding — and the general support for the sector enjoyed under the previous administration — would be going away.
By that point, the company had already planned to move its Wyoming venture to Louisiana after struggling to secure a grid connection at its original site. CarbonCapture had been awarded a DAC Hubs grant to conduct an engineering study for the project, but it received a notice from the DOE that the grant was canceled earlier this month. The company is still considering its options for how or whether to move forward.
On the same day the news leaked, CarbonCapture announced that it was shifting its plans to build a separate, 2,000 ton-per-year pilot plant from Arizona to Canada. Corless told me the company had originally planned to partner with a cement company to store the captured carbon in building materials, but Alberta offered more attractive commercial prospects. The company could more quickly access geologic carbon storage there, enabling it to sell carbon credits, which command a higher price than experiments in carbon-cured cement.
The timing of the announcement was pure coincidence. The poor prospects for an American DAC industry under Trump weren’t not a factor in the move, however. CarbonCapture wanted its pilot project to be a “springboard” for its first commercial plant, and Canada was attractive “given the favorable economic incentives, favorable regulatory environment, and the general positive interest in deploying DAC,” the company’s marketing director, Ethan Stackpole, told me in an email. “This is in contrast to the current atmosphere in the U.S.”
CarbonCapture signed a contract with DeepSky to host the pilot, dubbed Project Tamarack, in May, and set up a Canadian business entity called True North to build it. When I visited the site, the company was in the final stages of “commissioning” the unit, i.e. getting it ready to operate. The equipment had been manufactured at the company’s factory in Arizona, but it may end up being the only system produced there. The facility is now sitting idle.
Petre and I followed the tidy rows of wires and pipes that wound through Deep Sky Alpha, carrying electricity, water, and compressed air to each DAC system. A set of return pipes delivers the captured CO2 to Deep Sky’s central processing facility — the big white cylindrical building — where the company measures the output from each system before combining it all into a single stream. Inside, she showed me how the gas moved between large, tubular instruments that measure, dry, compress, and cool it into a liquid.
“Everything outside is first of a kind,” she said. “All of this equipment in here is fairly standard energy oil and gas equipment, it’s just arranged in a very different way.”
Sensors monitoring the wires and pipes enable Deep Sky to measure how much energy and water goes into producing a ton of CO2. Finally, trucks carry away the liquid CO2 to the Meadowbrook storage hub about two hours north, where an underground carbon sequestration well operated by a separate company called Bison Low Carbon Ventures provides it a permanent home.
While trucking the CO2 wasn’t ideal, the amount Deep Sky would capture at Alpha was so small that it made more sense to partner with Bison, which already had a permitted well, than to try to build one itself, Petre explained. When Deep Sky scales up at its next facility, which it expects to build in Manitoba, the company aspires to drill its own carbon sequestration wells on site.
Despite Alberta’s advantages for DAC, the location is not without drawbacks. The province had imposed a seven-month moratorium on renewable energy approvals from 2023 to 2024, which led to project cancellations and put development on ice. When the ban lifted, new regulations restricting wind and solar on agricultural land and near designated “pristine viewscapes” continued to make it difficult to build. Petre told me Deep Sky was one of only two companies in Alberta to secure a power purchase agreement with a solar farm last year.
“If I said, ‘I need 150 megawatts for my next facility right now,’ it would be a fairly difficult process,” she said. “There isn’t that much capacity online, and I would have to compete with data centers and a whole bunch of other folks who are also looking to come here and develop.” The company has started looking into building its own renewable energy supply on site, she said.
That anti-renewable sentiment stems from the region’s strong oil and gas identity. After my tour with Petre, I sat through a short program celebrating Project Tamarack’s launch, where Alberta’s Premier Danielle Smith conveyed her excitement by asserting that the province was “working to phase out emissions, not oil and gas production.” Alberta would double its energy production in the coming years, she said, while still reaching a goal of carbon neutrality by 2050.
Of all the extraordinary things I had seen and heard that day, this was the most brazen. The promise of direct air capture — the entire reason to expend time and energy and funds on plucking CO2 molecules out of the air — is that it’s one of the few ways to clean up the carbon that’s already in the atmosphere. Using it to offset continued oil and gas production might slow climate change, but there are a lot of other cheaper, more efficient, and more effective ways to reduce emissions — like switching to carbon-free power and electric cars.
I asked Corless about Smith’s comments later that day over coffee. Was it realistic to double oil production and go carbon neutral? He was coy. It would be very hard, he said. But it also depends on whether you’re talking about neutralizing the emissions from producing the oil versus from burning it. Corless seemed to view the argument as a political necessity, if a dubious one, to win government support for scaling DAC.
“I was hopeful that when the new administration came in, we could create an economic argument and tie what we’re doing to energy dominance and energy security,” he said, of the Trump administration. “It was just, I think, a bridge too far. Whereas here, that narrative is landing.”
Petre was more equivocal, responding that Deep Sky acknowledges that “we are not going to move away from oil and gas tomorrow,” and takes this as motivation to “get direct air capture to as low cost as possible and as easy to deploy as possible.”
In addition to the five DAC units currently installed at Alpha — SkyRenu, Airhive, CarbonCapture, Mission Zero, and a system from a German company called Phlair — Deep Sky has announced plans to bring two more units to the site from Skytree and GE Vernova. A few other deals are in the works but not yet public, Petre told me.
Even once Deep Sky Alpha has enough capacity installed to be printing carbon credits by the day, it won’t have proven that DAC is viable at scale. It’s not meant to. Many aspects of the facility are intentionally inefficient because of its nature as a testing ground.
“We had to do a lot of overspec-ing and oversizing of things,” Petre said. All the excess makes her optimistic about Deep Sky’s next project, however, where it will scale up a smaller number of systems to a much larger capacity. “If we can do something this complex, there’s a lot of room to simplify,” she said.
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On Palisades’ progress, Taliban minerals, and New York’s climate superfund
Current conditions: Tropical Depression Five is barreling northwest from the Caribbean to Houston • In the Pacific, Hurricane Karina has strengthened into a Category 4 storm, but it’s unlikely to make landfall anywhere • The surface temperature of the Yellow Sea is nearly 85 degrees Fahrenheit, fueling storms across South Korea.
President Donald Trump is among the few politicians in America willing to stand 10-toes-down in defense of the need to build out more data centers. In a post Monday on Truth Social, the president admonished communities that reject data centers as misguided and foolish. “The only reason that communities throughout the U.S.A. should not want data centers is if they want to end up being backwards and poor,” Trump wrote. “If they want to be successful and rich, with far lower taxes and jobs all over the place, let data reign.” Still, he said “plenty of other places” want them. “If we kill the Golden Goose, you will only have yourselves to blame,” he wrote. “China could not be happier with this anti data center movement.” It’s not a popular stance. Heatmap Pro’s latest polling shows that three-quarters of Americans now oppose data centers built in their backyards.
The U.S. District Court for the Northern District of New York struck down the state’s Climate Change Superfund Act on Monday, ruling that the 2024 law is invalid under the federal Clean Air Act. The law set up a cost recovery scheme whereby fossil fuel companies would pay into a fund used to finance climate change adaptation-related infrastructure projects. The state’s argument rested in part on the Trump administration’s decision earlier this year to rescind the Environmental Protection Agency’s endangerment finding on greenhouse gases, which gave the agency authority to regulate climate pollution. That move “cannot be reconciled” with the administration’s argument that the CAA preempts New York’s law, the state said. Judge Brenda K. Sannes dismissed that reasoning in her decision, citing the Supreme Court’s ruling in American Electric Power v. Connecticut from 2011, which, as my colleague Emily Pontecorvo put it, “established companies’ protection from federal public nuisance claims over greenhouse gas emissions. That decision sprang from the Court’s earlier 2007 decision that the Clean Air Act covers greenhouse gas emissions — which the EPA is now contesting.”
The case was one of at least four the Trump administration has pursued against states attempting to make fossil fuel companies cover the costs of adapting to climate change. Judges have already ruled against its attempts to prevent Hawaii and Michigan from suing fossil fuel companies, however a case against a similar superfund law in Vermont is still pending. “New York’s law would have expropriated $75 billion from energy companies around the world during an energy emergency and in direct defiance of American foreign policy and federal law,” Adam Gustafson, principal deputy assistant attorney general of the Justice Department’s Energy and Natural Resources Division and the administration’s lead attorney in this case, said in a statement. “We will continue to fight for affordable, reliable energy for all Americans.”
A sign of how much an industry is really booming is whether startups begin popping up to provide ancillary services. Here’s a prime example of the artificial intelligence buildout’s energy boom: The AI energy software provider Verse told Heatmap exclusively for this newsletter that it now has 30 gigawatts of power under its platform’s management. The company’s flagship product, Aria, is an intelligence platform for data center companies that brings utility bills, contracts, power purchase agreements, and live power usage data under one dashboard. The company also helps manage on-site assets such as batteries. “You can't solve for speed, cost, risk, and carbon while your supply contracts, your load, and your flexible assets sit in separate silos,” Seyed Madaeni, Verse’s chief executive and co-founder, said in a statement.
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When Holtec International starts the Palisades nuclear plant back up, the facility in western Michigan will be the first in the nation to return to life after a permanent shutdown. Once complete, the Palisades restart will set off a series of other projects, including some to repower defunct nuclear plants in Pennsylvania and Iowa. That makes each milestone in the Palisades project notable — but the one it reached Monday is particularly promising. Holtec started loading fuel into the reactor, setting the stage for it to return to service potentially before the end of the year, months before the official March 2027 start date. “Loading fuel into the Palisades reactor is an important milestone and a reflection of the tremendous effort of the men and women who have brought this plant to this point,” Fadi Diya, Holtec’s chief nuclear officer, said in a statement. Palisades’ completion won’t just kick off more restarts. Holtec also plans to build its first two 300-megawatt small modular reactors at the site. Based on the industry’s standard pressurized water technology, the company has received hundreds of millions from the Department of Energy to support its construction.

Commerce can, at times, be the ultimate salve. Raw materials flowed from the U.S. to British factories even after the American Revolution and the War of 1812. Japanese and German automobiles dominate American roads decades after those nations’ defeats in World War II. As memories of war fade, Americans buy nearly $200 billion in Vietnamese goods each year, helping to transform the Southeast Asian country into a top manufacturing hub. Now the Taliban is making its pitch to Washington’s wallet. The Islamist group now leading Afghanistan said it would “absolutely” welcome U.S. investments in the rural, mountainous, and underdeveloped Central Asian country’s mining, infrastructure, or agriculture industries. “Relations between Afghanistan and the United States should not be assessed through the lens of the past 20 years of war, but rather on the basis of future co-operation,” Taliban foreign minister Amir Khan Muttaqi told the Financial Times at his office in Kabul. “Our economic policy is open.”
Meanwhile, from China to the U.S., lithium producers are posting what Bloomberg called “bumper profits.” Demand for energy storage is soaring, especially as countries seek to insulate themselves from the effects of the Iran War energy shock. As a result, Chinese companies such as Tianqi Lithium and Ganfeng Lithium Group reported their strongest net income in three years during the first six months of 2026. North Carolina-based Albemarle said global lithium demand had grown 45% compared to a year earlier. Australia’s PLS Group, meanwhile, “swung a $377 million profit in the 12 months to June 30 from a loss the year before,” the newswire reported.
You don’t need to be an expert in emerging markets to recognize the potential for solar. Countries that haven’t yet extended grid networks into rural areas can electrify villages using panels that are increasingly cheap and flooding into places such as sub-Saharan Africa, as I told you last week. You won’t need deep connections in those countries to start investing in that renewable energy potential, either. The startup Odyssey Energy Solutions, as my colleague Katie Brigham put it, “acts as a middleman between local installers and global capital providers that want exposure to developing markets but typically wouldn’t take the risk of financing small companies in unfamiliar environments.” This morning, the company told Katie exclusively, it’s announcing that it has raised another $74 million to fund its buildout.
Across the Global South, distributed energy is “leapfrogging a centralized grid,” Odyssey’s cofounder told Heatmap.
As old and increasingly strained as the U.S. electric grid is, Americans can still mostly count on it to keep the lights on. The average U.S. resident experiences just a few hours of power outages each year thanks to the country’s sprawling electricity distribution system. But that level of reliability is far from standard globally. Across parts of Africa, Asia, and South America, grids can be fragmented, undersupplied, and unreliable, forcing businesses to turn to expensive diesel generators for backup power — or even as their primary source of electricity when the grid can’t reliably reach them.
But as energy demand surges across the Global South, diesel prices rise with the ongoing Strait of Hormuz closure, and costs for solar and batteries continue to fall, the economics of energy in emerging markets are rapidly shifting. Commercial and industrial customers are increasingly turning to distributed solar as a reliable, affordable supplement — or alternative — to a conventional grid connection. The problem is that the small and midsize local companies capable of building these projects often lack the cash to purchase panels and batteries upfront. Equipment suppliers, meanwhile are often reluctant to extend them credit because they see the small businesses as too risky.
Odyssey Energy Solutions is built to solve that disconnect. Founded in 2017, the startup acts as a middleman between local installers and global capital providers that want exposure to developing markets but typically wouldn’t take the risk of financing small companies in unfamiliar environments. After raising a $15 million Series A in 2023, the company announced on Tuesday that it has closed a $74 million fundraising round — $27 million of equity, $47 million of debt — to expand its financing and procurement platform, deepen its presence in core markets such as Nigeria and India, and widen its business in Mexico and adjacent Latin American countries.
“It’s the same story as cell phones leapfrogging landlines,” Emily McAteer, Odyssey’s co-founder and CEO, told me. “It’s distributed energy leapfrogging a centralized grid.”
Today the company has about 6,000 commercial and industrial solar installers on its platform across more than 50 countries, and has facilitated over $3.6 billion in financing for distributed energy projects. Odyssey is planning to use its latest funding to expand beyond solar into other offerings, including financing batteries for electric two- and three-wheelers such as motorcycles and rickshaws, common modes of transit in many of its markets.
Whether it’s solar or motorcycles, Odyssey’s model works much the same way: The company places equipment orders on behalf of installers, letting them pay off the cost over time, after their own customers pay them first. While Odyssey places many small orders rather than large bulk orders with suppliers, its high transaction volume gives it significant purchasing power, allowing it to negotiate far better prices than a small business could. That lets Odyssey earn a margin on the equipment it sells while still offering installers a better deal than they would be able to secure independently.
For the installer, McAteer explained, it’s a pretty straightforward process, “You come to Odyssey’s procurement platform; you upload [the materials you need]. We come back, give you some options and good pricing on the [photovoltaic panels], the inverters, the batteries. You buy from us; you put a little bit down — a small deposit — and then the rest of the payment is due once you’ve gone and built your system, you’ve commissioned, and you’ve been paid by your client.”
Fronting that equipment cost requires significant debt on Odyssey’s own balance sheet. But because installers repay Odyssey once their projects are built, debt is a cheaper way to secure that working capital than equity, which is why it makes up the bulk of this latest funding round. McAteer says the company expects to raise another $50 million in debt over the next six months specifically to fund the extended payment terms it offers installers.
Working with thousands of these small and medium sized businesses also gives Odyssey another valuable asset: a wealth of data on their projects and performance over time. In 2021, the company acquired remote monitoring and controls startup Ferntech, giving it visibility into things like a solar project’s energy output and how customers are using that power. The data then feeds into Odyssey’s underwriting tools, giving prospective investors and lenders a way to evaluate which installers are creditworthy.
That matters because while Odyssey can help small businesses get equipment, these installers still require longer-term institutional capital from the likes of banks or development finance institutions to build their projects and support their ongoing operations. By giving capital providers a window into which installers are reliable and what projects perform well, Odyssey helps derisk the fragmented distributed energy market.
The company’s timing is certainly fortuitous. In Nigeria, one of Odyssey’s primary markets, the cost of diesel has risen over 93% in a matter of months this year due to supply disruptions in the Middle East. That’s thrown the country’s energy markets into disarray, as the country spends roughly three times as much on power from backup diesel generators as it does on grid electricity.
“There is more diesel generator capacity than there are power plants connected to the grid,” McAteer said of Nigeria. “So you already have distributed energy resources — just not renewable resources — powering the grid.” The near doubling of diesel prices has made solar and storage more compelling than ever for the country and the continent as a whole. Governments in many African countries are already offering cash incentives to distributed energy developers once their projects are up and running as part of a broader electrification push backed by a $30 billion joint commitment between the World Bank and the African Development Bank.
India, another core market for Odyssey, has also set ambitious clean electricity goals, aiming to install 500 gigawatts of non-fossil capacity by 2030, while also requiring solar cells to be manufactured domestically. At the same time, the country’s booming data center buildout is poised to drive up electricity demand, putting strain on an already unreliable grid that also depends on backup diesel power. Together, these trends are fueling a solar surge in the country — a wave that Odyssey wants to capture. India is now on track to become the world’s second largest solar market by annual installations this year, according to BloombergNEF — overtaking the U.S. and trailing only China.
“Pretty much in any market where we work, there’s just a lot happening that’s all converging around distributed energy as the future,” McAteer told me. If she’s right, some of the nations with the world’s weakest grids could be the ones best positioned to build what comes next.
A bill awaiting Governor Gavin Newsom’s signature would require utilities to at least offer to subsidize home electrification.
Going into this final stretch of the summer, I’m keeping an eye on California. Today is the last day for the state legislature to pass bills as part of its 2026 session, and lawmakers have already sent some interesting clean energy proposals to Governor Gavin Newsom’s desk.
On Friday, the legislature passed the Home Energy Choice Act, a bill supporting the transition to all-electric homes in the state, which builds on a growing set of policies and programs I’ve been writing about called “non-pipeline alternatives.”
Natural gas companies are constantly replacing and expanding the pipelines that deliver gas to people’s homes, but these kinds of investments are starting to look less prudent in states that are trying to transition off of fossil fuels. Utilities recover the costs of pipelines over decades through the rates their customers pay; but as people start to electrify their homes, there will be fewer customers to absorb those expenses, risking ballooning energy bills. Non-pipeline alternative programs typically require utilities to consider options for deferring or even avoiding these investments.
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Several states have created pilot programs that enable utilities to take the money they would have spent replacing an aging pipeline and instead use it to help customers go electric. Two years ago, California lawmakers authorized such a pilot focused on decarbonizing entire neighborhoods, but the implementation has been slow. The deadline for utilities to submit proposals for the first round of pilot projects isn’t until next April.
The Home Energy Choice Act would complement that program. Whereas the pilots are designed to work around replacing gas mains, the larger pipes that run down the middle of streets, the new bill would target gas service lines, the smaller pipes that connect individual homes to the mains.
In some ways, the new bill is more aggressive than the existing pilot program. In the case of the pilots, the utility has to get 67% of a neighborhood onboard before seeking approval from the utility commission to decarbonize. The new program would set no such threshold. Every time a utility identifies a service line that needs to be replaced, it will have to offer the customer at the end of the line a financial incentive to electrify instead. If Governor Newsom signs the bill, it will be the first law in the country to require investor-owned utilities to offer their customers non-pipeline alternatives.
Still, it’s entirely up to the customer whether or not to accept the incentive, so it’s unclear how effective it will be. The bill doesn’t specify how much money the utility has to offer, punting that decision to the state’s regulators. But it does say the incentive has to be lower than the average cost of a service line replacement so that it creates net savings for the utility — and therefore for the utility’s ratepayers. Service line replacements average $35,000 to $55,000 in California, according to an evaluation of the Home Energy Choice Act by University of California, Los Angeles, researchers. Earthjustice and the Natural Resources Defense Council, the environmental groups that backed the bill, propose a base incentive of $15,000 per home, with a bump to $20,000 for homes in disadvantaged communities.
While that might sound substantial, it’s not going to be enough, in many cases, to cover the entire cost of heat pumps, an electric water heater, an electric or induction stove, and an electric clothes dryer. The UCLA study pins average costs for whole-home electrification in California at upwards of $25,000.
Homeowners will be able to combine the incentive with other state subsidies, but that can get complicated. One of the biggest challenges with these kinds of programs is that planning a whole-home electrification project is essentially a full time job.
Last fall, I wrote about an incentive program run by the utility Con Edison in New York State called Electric Advantage. It’s similar to California’s neighborhood pilots, in that it targets gas mains instead of service lines. If all the homeowners served by a main agree to go electric, ConEd will cover 100% of the cost of replacing their gas-powered appliances with electric versions, plus installing insulation and air sealing. My story was about Julie Liu, a contractor the utility hires to manage these projects. Liu fronts the cost of the retrofit and handles all of the scheduling and coordination between electricians, plumbers, insulation specialists, and other building professionals. She braids together various incentives to get the job done for as little money as possible. And what I learned in writing about her is that she was basically one of a kind — ConEd hadn’t been able to find anyone else to do what she did.
That leads me to one of my big questions about this California bill: Will the gas companies manage the retrofits themselves, contract with third parties like Liu, or just give the money directly to homeowners? The bill doesn't specify, so that’s something utility regulators will have to work out if Newsom signs it into law.
I also wonder about relying on utilities to sell the idea of electrification to customers, especially since not all natural gas companies in California offer electricity service. How hard will they try to lose business? The bill does contain some safeguards to ensure the companies make a concerted effort, such as requiring that they notify customers of the climate and health benefits of going electric and of additional incentives they might be eligible for. The UCLA report recommends that regulators create additional incentives to get utilities on board, such as giving them a generous rate of return on the cost of the program.
Despite these questions, the bill looks well-suited for this moment of concerns about energy affordability, with its focus on reducing capital spending and maintaining customer choice. Newsom has until September 30 to veto it or sign it into law.