More than a fifth of renewable energy firms have recorded a loss this year.
Of these, around half have recorded a loss for the second year in a row.
Analysis of 961 green companies from Plimsoll Publishing, shows 257 firms recorded a loss this year, 126 made a loss for the second year running and 281 have been categorised as being in financial danger.
The report also shows average profit margins in the industry have fallen to only 6%.
David Pattison, Senior Analyst on the report, said: “Profitability is key to a company’s success. The difficulty for any business working in a very competitive market is to make a good profit.
“For the companies that are falling behind, they need to re-evaluate their strategy and retain profit in order to improve their financial strength. Further to that, however, it appears there is some cause for optimism as the report showcases 219 firms as “exceptional” performers.
“These firms, despite the pressure in the market, have recorded record profits and sales increases. The report uses these as example companies of the success that can be achieved even in a saturated market place.”