As share prices around the world continued to fall sharply in the wake of the weekend collapse of US investment bank Bear Stearns, experts today warned that cleantech projects could soon find it significantly harder to raise project financing as a result of the expanding credit crisis.

Speaking at Library House's UK Technology Innovation and Growth Forum earlier today, a panel of clean tech experts agreed that while the long term outlook for the sector remained upbeat the tightening credit markets are posing a short term problem.

Kevin Arthur, chief executive of solar cell specialist Quantasol, admitted he was "a bit concerned" about project finance and the availability of credit following the bailout of bear Stearns by JP Morgan and growing fears that the global credit crunch could yet claim more victims.

Large clean tech infrastructure projects could be particularly badly hit by the Bear Stearns crisis, according to Stuart McKnight, managing director of investment consultancy Ascendant. "Big infrastructure projects depend on substantial levels of capital being made available," he said. "The larger projects, and in particular those about to come on line, will be impacted by Bear Stearns."

Jonathan Lansdale of cleantech investment company Low Carbon Accelerator, admitted the credit crunch was already impacting investment decisions. "There is a need to look at how an investment can be rolled out and how difficult finance might be to attain," he said.

However, the panel agreed that while some projects may find it harder to attract funding the overall outlook for the clean tech industry remained extremely upbeat.

"Cleantech is not recession proof," said Justin Adams, director of technical strategy, venturing and innovation at BP. "But the drivers behind current interest in the sector are enduring and will remain with us whether we go through a shallow or deep recession – there remains a huge upside to cleantech investments."

Arthur agreed the long term outlook remained positive, adding that while firms may have to fight harder for funding the pressures to invest, particularly from government regulation, remained as strong as ever. "If you look at California and the South West US there is a huge pressure on all the utilities to roll out renewables," he said. "[The credit crunch] is concerning but the pressure is still there and these firms will find the project finance."

Greg Machou, senior partner at venture capitalists Woodside Capital Partner, said that of the financial crisis could even do the clean tech sector some favours by removing "some of the froth" from the market.

Lansdale agreed some areas of the clean tech have become overvalued and warned that investors needed to treat each industry sub sector on its own merits if they are to avoid "getting their fingers burnt". "There is not a bubble when you look at the sector overall, but there are areas that are overvalued," he warned. "We have seen some disastrous valuations in the biofuel sector, for example, and investors would be advised to look more closely at clean tech sub sectors that are under the radar."