The collapse of Lehman Brothers and the subsequent market fallout could thin the flow of cleantech IPOs for up to two years, say analysts, as strained equity investors adopt a more conservative approach.

The cleantech market is a high-risk business, and very capital intensive, said Paul Sidlo, CEO of solar concentrator startup SunRGI, who is worried that constrained credit could cause problems for project owners.

"In the short term, it makes credit harder to get - it has an effect on capital, leasing – all the things you would do to get project funding," he warned, adding that ventures in areas such as photovoltaic solar were still considered to be relatively high risk. "We just came out in June, so we're really young compared with everyone else, and I'm certain that it will have an impact on raising money."

However, Sidlo hopes that an ongoing need for low-cost energy would put cleantech’s fortunes to rights in the longer term.

Paul Herman, chief executive and founder of cleantech investment advice group HIP Investor, agreed that the need for cleantech would avoid the kind of attrition experienced among technology companies in the dotcom crash. However, he added that the crisis would have a greater effect on more mature cleantech firms, many of which could be ripe for acquisition.

Venture capital firms such as Kleiner Perkins Caufield & Byers, which has a green technology investment alliance with Generation Investment Management, are unlikely to be affected in the short term because of their multi-year investment focus, predicted Herman.

"A hedge fund may not be as active," he continued. "It certainly won't be helpful in getting later- stage private equity or hedge funds, but in terms of earlier companies coming out of the gate with innovations, the short term will be OK."

The squeeze in late-stage funding could lead to a shortage of cleantech IPOs for the next two years while companies wait for the market to recover, Herman added. "Newer cleantech companies might not come to market for two years," he observed. "By that time, unless there's an extended global depression, it should be OK. But I don't think there will be many coming out of the gate."

However, David Metcalfe of independent green business research firm Verdantix insisted that cleantech firms' prospects would vary hugely depending on the sectors they are operating in. " There will be a lot of difficulty raising money for projects that are high risk, " he said. "You have to wonder how something like carbon capture technology, which is not yet fully proven, will get the funding it needs... but more mature projects where the returns are relatively predictable, such as onshore wind, should continue to go ahead."

Signs of nervousness in the cleantech market were already apparent yesterday as the markets digested the implications of the Lehman Brothers collapse and Merrill Lynch sale.

The Wilderhill Clean Energy Index closed 6.34 per cent down on Monday, faring worse than the Nasdaq, the S& P500, and the Dow Jones Industrial Average index, which fell 3.6 per cent, 4.71 per cent, and 4.42 per cent respectively. Stock in GT Solar, which came to market in July, lost 6.71 per cent of its value since its close on Friday, compared with a 3.6 per cent overall loss on Nasdaq, the market on which it is listed.

In the short term, much will depend on the renewal of the production tax credit, a financial incentive meant to kickstart renewable energy projects and which expires at the end of this year. The credit may be extended if an $84bn Energy Reform Act gets through Congress. That vote could happen as soon as this week.