Falmouth-based renewable heat company EarthEnergy Ltd has gone into administration.
The company, which makes ground source heat pumps, appears to have been a victim of the public spending squeeze.
Managing director Brian Kennelly said: “Most of our business was related to the public sector and it pretty well dried up following the Comprehensive Spending Review in October.”
Administrators are said to be “very hopeful” of finding a buyer for the firm which was founded in 1996 and employs 24 people.
Ian Walker of Begbies Traynor said: “This company is at the forefront of the industry in pioneering green energy. There is likely to be considerable interest in the business and I am very confident the business will be sold as a going concern in due course.”