Low oil prices and the credit crunch are threatening to stall the green revolution. The value of crude has dropped from a summer high of nearly $150 a barrel to below $40, taking the wind out of the sails of turbine manufacturers and others ­trying to build low-carbon alternatives.

Jeremy Leggett, founder and executive chairman of Solarcentury, says: "Talk of the death of renewables is premature but clearly big solar farms and wind projects are being cancelled. Everything is suf­fering in the current climate but its my contention that the low oil price is a temporary thing and the growth of renew­ables will resume."

Michael Liebreich, chief executive of information provider New Energy Finance, says his leading index of clean-technology companies has fallen from a high of 450 points 12 months ago to 175 points, hit by a triple whammy of lower oil prices, higher costs of capital and fear of more speculative start-up businesses.

But he too is confident that the sector can bounce back. "There was no doubt that there was a certain amount of irrational exuberance over the low-carbon economy. No industry in history has kept up the kind of 40% compound growth rates being ascribed to clean tech so share prices had run up too far and it was time for a correction."

Clean-tech and renewables stocks have been struggling with more than just sentiment. Indian-based wind turbine manufacturer Suzlon Energy, which has seen its share price plunge by 90% this year, has also been hit by malfunctions and the kind of teething problems it says is are inevit­able with new types of technology.

Wind developers in the US have been cutting back in the face of tough new conditions. FPL Group, the US's largest wind-power operator, is cutting its ­spending this year by nearly a quarter to $5.3bn (£3.7bn) and new wind-power generation from 1,500 to 1,100 megawatts.

Confidence in the sector has also been rattled by T Boone Pickens, a veteran oil man who delighted environmentalists with a very public conversion when he promised to build the world's largest wind farm in Texas. He slammed on the brakes in November on the basis that lower oil prices had changed the economics of a scheme that would have powered 1.3m homes.

However the US wind sector has generally been faring better than the British one, thanks to tax breaks. Shell and BP have made it clear they are no longer interested in pursuing UK farms when the investment numbers stack up much better across the Atlantic.

The decision by Shell to pull out of the London Array wind farm was a particular blow to British confidence. The project has been billed as the biggest offshore scheme of its kind in the world but the oil company said the margins were too thin, leaving E.ON of Germany and Dong Energy of Denmark to go it alone.

Anton Milner, the chief executive of Q-Cells, the world's largest manufacturer of solar cells, cut earnings forecasts recently after being hit by what he described as a "flood" of cancellations from developers of solar-power projects struggling to raise finance. The US manufacturer Evergreen Solar has since delayed an $800m new factory in Asia that would have manufactured enough solar cells to power a city of 500,000 people.

But most industry figures are convinced that though the threat of global recession is slowing down the industry, the future remains bright enough, especially with a new figure taking over the White House. Liebreich says his clean-tech index has seen an "Obama bounce", rising from a low of 130 to 175 on the back of optimism about the incoming president's policies.

A raft of radical political appointments – such as Nobel physics laureate Steven Chu as energy secretary – has convinced environmentalists that Barack Obama is serious about his stated aim of hastening progress towards a low-carbon economy with a green New Deal that will reduce his country's dependence on imported oil.

A quarterly review of climate change-related business opportunities just published by analysts at HSBC says governments are increasingly active. "The engagement of governments has grown globally," they say. "Across the political spectrum there is now more recognition that climate change is a genuine long-term global issue with real growth potential."

Martin Wright, managing director of Marine Current Turbines, says no one should expect oil and gas prices to stay low. "Vladimir Putin has already said the era of cheap gas is over and no one knows when peak oil really will come about. So we can expect enormous price volatility, which all points to the need for Britain to develop an independent low-carbon alternative."