UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-QSB/A
                                (Amendment No. 1)
                          (Filed on November 12, 1998)


(Mark One)
X       QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the quarterly period ended March 31, 1998

        TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the transition period from ___________ to ___________   

Commission file number  1-12738


                            ONSITE ENERGY CORPORATION
                 (Name of small business issuer in its charter)


                Delaware                                 33-0576371   
    (State or other jurisdiction of           (IRS Employer Identification No.)
     incorporation or organization)


       701 Palomar Airport Road, Suite 200
              Carlsbad, California                         92009
    (Address of principal executive offices)             (Zip Code)

               (760) 931-2400
       (Issuer's telephone number)



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|


The number of Class A common stock, $0.001 par value, outstanding, as of May 20,
1998 is 15,585,569.


<PAGE>2

                            ONSITE ENERGY CORPORATION


Part I - Financial Information                                            Page

     Item 1   Financial Statements

          Condensed Consolidated Balance Sheet at
          March 31, 1998                                                    3

          Condensed Consolidated Statements of Operations
          Three Months Ended March 31, 1998 and 1997
          Nine Months Ended March 31, 1998 and 1997                         4

          Condensed Consolidated Statements of Cash Flows
          Nine Months Ended March 31, 1998 and 1997                         5

          Notes to Condensed Consolidated Financial Statements              6

     Item 2    Management's Discussion and Analysis of
               Financial Condition and Results of Operations                8

Item 1.  Financial Statements


                  [Remainder of page intentionally left blank]




<PAGE>3

                            Onsite Energy Corporation
                      Condensed Consolidated Balance Sheet
                                 March 31, 1998

Current Assets:
  Cash                                                             $   511,897
  Cash - Restricted                                                    152,925
  Accounts receivable, net of allowance for
     doubtful accounts of $15,030                                    4,596,374
  Costs and estimated earnings in excess of
     billings on uncompleted contracts                                 334,291
  Inventory                                                            110,273
  Other assets                                                         794,644
                                                                   -----------

           TOTAL CURRENT ASSETS                                      6,500,404

Cash-restricted                                                         78,990
Costs incurred on future projects                                       80,215
Property and equipment, net                                          1,166,489
Goodwill, net of amortization of $1,611,472                                  -
Other                                                                  141,615
                                                                   -----------

          TOTAL ASSETS                                             $ 7,967,713
                                                                   ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                                 $ 2,547,811
  Billings in excess of costs and estimated earnings                
     on uncompleted contracts                                        1,180,592
  Current portion of notes payable                                      75,572
  Accrued expenses and other liabilities                               928,261
      
     TOTAL CURRENT LIABILITIES                                       4,732,236
                                                                   -----------

Long-Term Liabilities:
    Accrued future operation and maintenance costs
      associated with energy services agreements                       421,432
                                                                   -----------

          TOTAL LIABILITIES                                          5,153,668
                                                                   -----------

Commitments and contingencies                                                -

Shareholders' Equity:
    Preferred Stock, Series C, 1,000,000 shares authorized,
        203,250 issued and outstanding
        (Aggregate $1,016,250 liquidation preference)                      203
    Common Stock, $.001 par value, 24,000,000 shares authorized:
       Class A common stock, 23,999,000 shares authorized,
         15,512,272 shares issued and outstanding                       15,512
       Class B common stock, 1,000 shares authorized,
         none issued and outstanding                                         -
    Additional paid-in capital                                      20,709,565
    Accumulated deficit                                            (17,911,235)
                                                                  -------------

     TOTAL SHAREHOLDERS' EQUITY                                      2,814,045
                                                                  ------------

     TOTAL LIABILTIES AND SHAREHOLDERS' EQUITY                    $  7,967,713
                                                                  ============


The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.


<PAGE>4



                            Onsite Energy Corporation
                 Condensed Consolidated Statement of Operations


<TABLE>
<CAPTION>

                                      Three Months Ended                   Nine Months Ended
                                          March 31,                            March 31,
                                    1998              1997              1998              1997
                                --------------    -------------     --------------    --------------



<S>                            <C>              <C>                <C>               <C>         
Revenues                       $  3,452,652     $  1,646,305       $  8,994,035      $  7,892,695

Cost of sales                     2,677,705        1,322,262          6,819,570         5,782,767
                               ------------     ------------       ------------      ------------
     Gross Margin                   774,947          324,043          2,174,465         2,109,928

Selling, General, and
  Administrative Expenses         1,029,331          785,912          2,458,356         2,699,303
Depreciation & Amortization         151,497           71,173            415,421           360,656
                               ------------     ------------       ------------      ------------

     Operating loss                (405,881)        (533,042)          (699,312)         (950,031)
                               ------------     ------------       ------------      ------------

Other income (expense):
  Interest (expense)                 (5,762)         (40,858)           (14,350)         (141,688)
  Interest income                     9,392              383             22,766             7,759
  Other income (expense)            (47,641)               -            (53,200)                -
  Loss on sale of partnership
    interest                              -         (425,240)                 -          (425,240)
                               ------------     ------------       ------------      ------------
Total other income (expense)        (44,011)        (465,715)           (44,784)         (559,169)
                               ------------     ------------       ------------      ------------

Loss from operations before 
  provision for income taxes       (449,892)        (998,757)          (744,096)       (1,509,200)

Provision for income taxes            4,438                -             16,675                 -
                               ------------     ------------       ------------      ------------

  Net Loss                     $   (454,330)    $   (998,757)      $   (760,771)     $ (1,509,200)
                               ============     ============       ============      ============


Net loss applicable to
  Common Shareholders          $   (478,705)    $   (998,757)      $   (785,146)     $ (1,509,200)
                               ============     ============       ============      ============
Basic and diluted loss
  per Common Share             $      (0.03)    $      (0.09)      $      (0.06)     $      (0.14)
                               ============     ============       ============      ============


Weighted average shares         
  outstanding                    14,714,361       10,935,598         13,061,167        10,776,607
                               ============     ============       ============      ============

</TABLE>

The  accompanying  notes are an integral part of these condensed  consolidated
financial statements.



<PAGE>5


                            Onsite Energy Corporation
                 Condensed Consolidated Statement of Cash Flows


<TABLE>
<CAPTION>


                                                                       Nine Months Ended
                                                                           March 31,

                                                                    1998                1997
                                                              -----------------    ----------------
<S>                                                          <C>                   <C>
Cash flows from operating activities:

Net Loss                                                       $     (760,771)       $ (1,509,200)

Adjustments to reconcile net loss to net cash
  used in operating activities:
       Amortization of goodwill                                       266,667             300,000
       Amortization of acquired contract costs                        101,048             386,773
       Provision for future operation and                                           
          maintenance costs                                                -               54,256
       Depreciation and amortization                                  148,754              60,656
       Loss on disposal of partnership interest                            -              425,640
  Change in operating assets and liabilities:
       Accounts receivable                                         (3,213,391)             19,545
       Increase (decrease) in billings related to
           costs and estimated earnings on uncompleted                                       
           contracts                                                  800,611           1,039,531
       Inventory                                                     (110,273)                  -
       Amounts due pursuant to sale of subsidiary                          -             (421,834)
       Other assets                                                  (804,143)             65,696
       Cash-restricted                                                 41,252            (272,592)
       Accounts payable and accrued expenses                        1,958,506          (1,062,347)
                                                                -------------        ------------

     Net cash used in operating activities                         (1,571,740)           (913,876)
                                                                -------------        ------------
                                                              
Cash flows from investing activities:
       Acquisition of Fixed Assets                                   (327,597)                  -
       Proceeds from sale of subsidiary                                    -              778,166
                                                                -------------        ------------

    Net cash provided by (used in) investing activities              (327,597)            778,166
                                                                -------------        ------------

Cash flows from financing activities:
       Proceeds from issuance of stock                              1,947,287                   -
       Proceeds from exercise of stock options                         20,157              44,679
       Repayment of long-term debt                                    (83,104)           (631,813)
                                                                -------------        ------------

   Net cash provided by (used in) financing activities              1,884,340            (587,134)
                                                                -------------        ------------

     Net decrease in cash                                             (14,997)           (722,844)

Cash, beginning of year                                               526,894             976,470
                                                                -------------        ------------

Cash, end of period                                             $     511,897        $    253,626
                                                                =============        ============
</TABLE>

The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.


<PAGE>6

                            ONSITE ENERGY CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: As contemplated by the Securities and Exchange Commission under Item 310
     of Regulation S-B, the accompanying  consolidated  financial statements and
     footnotes have been condensed and do not contain all  disclosures  required
     by generally accepted accounting principles and, therefore,  should be read
     in  conjunction  with the Form 10-KSB for Onsite  Energy  Corporation  (the
     "Company")  as of and for the year ended June 30,  1997.  In the opinion of
     management,  the accompanying  unaudited condensed  consolidated  financial
     statements   contain  all  adjustments   (consisting  of  normal  recurring
     adjustments) necessary to present fairly its financial position and results
     of its operations for the interim period.

NOTE 2: The condensed  consolidated  balance sheet as of March 31, 1998, and the
     condensed  consolidated  statements  of  operations  and cash flows for the
     three  and nine  months  ended  March  31,  1998 and  1997,  represent  the
     financial position and results of operations of the Company. The results of
     operations  for the three and nine months ended March 31, 1998 and 1997 are
     not  necessarily   indicative  of  the  results  to  be  expected  for  the
     entire year.

NOTE 3: In February 1997, the Financial  Accounting Standards Board issued a new
     statement  titled  "EARNINGS  PER SHARE" ("FAS 128").  The new statement is
     effective  for both interim and annual  periods  ending after  December 15,
     1997.  FAS 128  replaces  the  presentation  of primary  and fully  diluted
     earnings per share with the  presentation of basic and diluted earnings per
     share.  Basic  earnings per share  excludes  dilution and is  calculated by
     dividing income  available to common  stockholders by the  weighted-average
     number of common shares  outstanding for the period.  Diluted  earnings per
     share  reflects the  potential  dilution  that could occur if securities or
     other  contracts  to issue common  stock were  exercised or converted  into
     common  stock or resulted in the  issuance of common stock that then shared
     in the earnings of the entity.  Common stock  equivalents for the three and
     nine months ended March 31, 1998 and 1997 were  anti-dilutive  and excluded
     in the earnings per share computation.

NOTE 4: On October 28,  1997,  the  Company  entered  into a Stock  Subscription
     Agreement  (the "Stock  Agreement")  with  Westar  Capital,  Inc.  ("Westar
     Capital").  Pursuant to the Stock  Agreement,  the  Company  made a private
     placement  of  2,000,000  shares of the  Company's  Class A Common Stock at
     $0.50  per  share  and  200,000  shares  of  its  newly-created   Series  C
     Convertible  Preferred  Stock  ("Series C Stock") at $5.00 per share.  Each
     share of Series C Stock is  convertible  into five shares of the  Company's
     Class A Common Stock and earns a dividend of 9.75 percent per annum.

     In a related transaction on October 28, 1997, the Company  entered  into  a
     Plan and Agreement of Reorganization (the "Reorganization Agreement")  with
     Westar  Capital,  Westar  Energy,  Inc. and Westar Business Services, Inc.,
     a Kansas corporation ("WBS"). Pursuant to the Reorganization Agreement, the
     parties  effected  an  exchange under Section 368 (a)(1)(B) of the Internal
     Revenue Code of  1986, as amended (the "Reorganization"). Specifically, the
     Company acquired 100

<PAGE>7

     percent of WBS's  issued and  outstanding  capital stock, consisting solely
     of Common Stock, no par value, in exchange  for  1,700,000  shares  of  the
     Company's  Class  A  Common Stock,  par value $0.001 per share. On or about
     March  31,  1998,  an  additional  800,000  shares of the Company's Class A
     Common  Stock  were  issued  to  Westar  Capital  based on the execution of
     a certain  additional  business  contract.  The number of shares issued was
     determined through negotiations between the parties.  As a  result  of  the
     Reorganization,  WBS  is  now a wholly-owned subsidiary of the Company, and
     has legally changed its name to Onsite Business Services, Inc. ("OBS").

     OBS  provides   performance  contracting  services,  utility  services  and
     industrial  water services primarily in the states of Kansas,  Missouri and
     Oklahoma.

     The  following  presents Pro Forma information as if the acquisition of WBS
     occurred on July 1, 1996:

<TABLE>
<CAPTION>

                                        Three Months Ended             Nine Months Ended
                                            March 31,                      March 31,

                                         1998          1997            1998            1997
                                    ------------  -------------   --------------  -------------

<S>                                 <C>           <C>             <C>             <C>          
Revenues                            $  3,452,652  $   2,225,555   $  9,592,703    $   9,630,445
                                    ============  =============   ============    =============

Loss from Operations                    (405,881)      (571,792)      (917,980)      (1,066,281)
                                    ============  =============   ============    =============

Net Loss                                (454,330)    (1,037,507)      (979,439)      (1,625,450)
                                    ============  =============   ============    =============

Basic and Diluted Loss Per Share    $      (0.03) $       (0.07)  $      (0.07)   $       (0.11)
                                    ============  =============   ============    =============

</TABLE>


NOTE 5:   Subsequent Events

     Effective  in June 1998,  the Company  entered into an agreement to acquire
     Lighting Technology Services, Inc. ("LTS"), a Santa Ana,  California  based
     lighting services company.  In  exchange for  all of the outstanding shares
     of  LTS,  the  Company  initially  issued  a total of 690,000 shares of the
     Company's Class A Common Stock plus  $500,000 in cash to the former  stock-
     holders.  The former LTS shareholders  also may receive a one-time earn-out
     payment in 1999, payable in either cash, or, at the Company's option, Class
     A Common Stock.  The earn-out payment will be based on LTS's actual pre-tax
     earnings contribution for a 12 month period ending March 31, 1999.  LTS  is
     a wholly-owned  subsidiary  of the Company,  and  will  continue  to pursue
     independent lighting services opportunities in commercial,  industrial  and
     educational markets while also providing lighting subcontractor services to
     the Company and other energy services companies.

     On or about  May 19,  1998,  the  Company  entered  into an Asset  Purchase
     Agreement  and  an  Employment  and  Noncompetition  Agreement  with  SYCOM
     Enterprises, LLC

<PAGE>8

     ("SYCOM  LLC"),  SYCOM  Corporation and/or SYCOM Enterprises,  L.P. ("SYCOM
     L.P."),  and  related  entities for the purchase by a to-be-formed  wholly-
     owned  subsidiary   of   the    Company,    SYCOM     ONSITE    Corporation
     ("SO  Corporation"),  of  all of the assets, and the assumption of specific
     liabilities, of SYCOM LLC in exchange for 1,750,000 shares of the Company's
     Class  A  Common Stock.  In  addition,  pursuant  to  the   Employment  and
     Noncompetition  Agreement,  SO Corporation  will retain the services of all
     of the employees of SYCOM Corporation, and SYCOM Corporation and SYCOM L.P.
     will enter  into  a  noncompete  agreement  with  SO  Corporation  and  the
     Company  in  exchange  for  non-voting,  non-dividend  Series D Convertible
     Preferred Stock of the Company  ("Series D Stock") that is convertible into
     15,750,000 shares of the Company's Class A Common Stock. The Series D Stock
     will  be  held in  escrow  until certain performance-related conditions are
     met. The Company's Board  of  Directors  will be  increased  by two members
     designated  by SYCOM  LLC. The  transaction is  expected  to  be  completed
     before June 30, 1998.

NOTE 6: The purpose of this amendment to the Form 10-QSB for the Company for the
     period   ended   March  31,  1998  (the  "Original  Filing")  is to reflect
     adjustments arising from inadvertent errors in the way it accrued revenues,
     in the  valuation of  equipment  acquired in a business  combination,  in a
     billing  to a  customer,  and in costs  budgeted  and  incurred  under  two
     contracts  accounted  for  under the  percentage  of  completion  method of
     accounting.

     Any item in the Original Filing not expressly  changed  hereby  shall be as
     set forth in  the  Original  Filing.  All  information  contained  in  this
     amendment  and the Original Filing is subject to updating and supplementing
     as provided in the Company's periodic reports filed with the SEC subsequent
     to the date of such reports.

Item 2.   Management's Discussion and Analysis of Financial Condition and 
          Results of Operations.

The  information  included in this Form 10-QSB/A  should be read in  conjunction
with  Management's  Discussion  and Analysis and financial  statements and notes
thereto included in the Company's Form 10-KSB,  as amended,  for the year ending
June 30, 1997.

<PAGE>9



Background

The Company is a comprehensive energy service company (an ESCO) that assists its
customers  in  reducing  electricity  and fuel costs by  developing,  designing,
constructing,  owning and  operating  efficient,  environmentally  sound  energy
projects.  The Company offers a full range of professional  consulting services,
which include direct access planning, market assessments,  business strategy and
public    policy    analysis,    utility    deregulation    and    environmental
impact/feasibility  studies.  It is the Company's  mission to save its customers
money and improve  the quality of the  environment  through  independent  energy
solutions.

The  Company,  a  Delaware  corporation,  was  formed  pursuant  to  a  business
reorganization  effective  February  15,  1994 (the  "Reorganization"),  between
Western Energy Management,  Inc., a Delaware corporation formed in 1991 ("WEM"),
and Onsite Energy, a California corporation formed in 1982 ("Onsite-Cal"). Under
the  Reorganization,  Onsite-Cal  merged with and into the Company,  and a newly
formed  subsidiary of the Company  merged with and into WEM,  which survived and
became a wholly-owned  subsidiary of the Company. This transaction was accounted
for as a purchase of Onsite-Cal by the Company.

As of October 28, 1997, the Company owns all of the stock in OBS, which provides
performance contracting services, utility services and industrial water services
primarily in the states of Kansas, Missouri and Oklahoma.

Unless the context indicates  otherwise,  reference to the Company shall include
all of its wholly-owned subsidiaries.

Nine Months Ended March 31, 1998 Compared to the Nine Months Ended March 31, 
1997

        Results of Operations. Revenues for the nine months ended March 31, 1998
were $8,994,035 compared to $7,892,695 for the nine months ended March 31, 1997,
an  increase of  $1,101,340  or 13.9  percent.  The  increase  in  revenues  was
primarily  attributed to one larger sized energy efficiency contract and several
smaller sized  contracts in 1998, as well as the addition of operating  revenues
from OBS, which was acquired in October 1997.

Gross  margin for the nine months  ended March 31, 1998 was  $2,174,465  or 24.2
percent of revenues,  compared to $2,109,928,  or 26.7 percent of revenues,  for
the nine months ended March 31, 1997.  The slightly lower margin as a percent of
sales is due to the  completion  of several  small  projects  with  lower  gross
margins and the  commencement  of  construction on one large contract with lower
gross  margins  compared  to the prior  period.  This  lower  gross  margin  was
partially offset by an increase in higher margin consulting revenues.

Selling,  General and  Administrative  ("SG&A") expenses were $2,458,356 for the
nine month  period  ended March 31, 1998,  compared to  $2,699,303  for the nine
months  ended  March 31,  1997.  The  reduction  

<PAGE>10

of $240,947  or 8.9  percent is  attributable  to the  continued  efforts by the
Company to  implement  savings  and expense  reductions  in an effort to improve
overall operating  results.  This decrease was partially offset by the increased
SG&A from OBS and a new office in Northern California.

Net other  expense was $44,784 for the nine months ended March 31, 1998 compared
to $559,169  in net other  expense  for the nine  months  ended March 31,  1997.
Included in the  decrease in net other  expense for the nine months  ended March
31,  1998,  was a  one-time  non-recurring  loss on the  sale  of the  Company's
interests in a  cogeneration  system of $425,240 in the prior period and reduced
interest  expense  attributable  to  substantial  reductions  in principal  loan
balances outstanding.

Net loss for the nine months  ended March 31, 1998 was  $760,771,  or $0.06 loss
per share, compared to a net loss of $1,509,200, or $0.14 loss per share for the
nine-month  period ended March 31, 1997. Per share numbers in 1998 were adjusted
for dividends declared on the Series C Stock.

Three Months Ended March 31, 1998 Compared to the Three Months Ended March 31, 
1997

        Results of  Operations.  Revenues for the three month period ended March
31, 1998 were $3,452,652 compared to $1,646,305 for the three months ended March
31, 1997, an increase of $1,806,347, or 110 percent. The increase in revenues is
largely due to one large contract signed in the quarter as well as revenues from
OBS, which was acquired in October 1997.

Gross  Margin was  $774,947,  or 22.4  percent of revenues  for the  three-month
period ended March 31, 1998,  compared to $324,043,  or 19.7 percent of revenues
for the  three-month  period  ended March 31,  1997.  The  increase in margin is
largely attributable to higher margins in consulting revenue.

SG&A  expenses  were  $1,029,331  for the three  months  ended  March 31,  1998,
compared to $785,912 for the three months ended March 31, 1997.  The increase of
$243,419 or 31 percent, was largely attributable to the additional SG&A expenses
acquired  with OBS, as well as increased  SG&A  associated  with a new office in
Northern California.

Net other  expense was $44,011 for the three month  period ended March 31, 1998,
compared to $465,715 in net other expense for the three month period ended March
31, 1997, a decrease of $421,704 in net other expense.  As discussed  above, the
decrease is due to the $425,240 one time non-recurring loss recorded on the sale
of the Company's interest in a cogeneration system in 1997.

Net loss for the three months ended March 31, 1998 was  $454,330,  or $0.03 loss
per share,  compared  to net loss of  $998,757,  or $0.09 loss per share for the
three-month period ended March 31, 1997.

        Liquidity and Capital Resources. The Company's cash and cash equivalents
were  $511,897 as of March 31,  1998,  compared to $526,894 as of June 30, 1997.
Working  capital  was  $1,768,168  as of March 31,  1998  compared to a negative
working  capital of $30,333 as of June 30, 1997. The increase in working capital
is largely due to the sale of securities to Westar Capital  completed in October
1997.

Cash flows used by operating  activities  during the nine months ended March 31,
1998 were  $1,571,740,  compared to cash flows used by operating  activities  of
$913,876 for the nine months ended March 31, 1997, an increase of $657,864.  The
increase  in cash flow used by  operating  activities  is due  primarily  to the
increase in accounts receivable and other assets.

Cash flows used by investing  activities were $327,597 for the nine month period
ended March 31, 1998, compared to cash flows provided by investing activities of
$778,166 for the nine month  period  ended March 31, 1997.  The increase in cash
flows used by investing activities is due to the acquisition of additional fixed

<PAGE>11

assets for the nine month  period  ended March 31,  1998  whereas the nine month
period  ended March 31,  1997  included  cash flows  provided by the sale of the
Company's interest in the cogeneration system as discussed above.

Cash flows  provided by financing  activities  were  $1,884,340  during the nine
months ended March 31, 1998, compared to cash flows used by financing activities
of $587,134 for the  comparable  period last year. The increase in cash provided
by financing  activities in the current year includes $1,947,287 in net proceeds
from the  issuance  of stock to Westar  Capital,  which is offset by  $83,104 in
repayment of long-term debt.

        Year 2000. The Company is developing  plans to address issues related to
the impact on its computer  systems of the year 2000.  Financial and operational
systems are being  assessed  and plans are being  developed  to address  systems
modification  requirements.  The financial impact of making the required systems
changes is not expected to be material to the Company's  consolidated  financial
position, liquidity and results of operations.



<PAGE>12


                                   SIGNATURES


In  accordance  with  the  requirements  of the  Securities  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                                            ONSITE ENERGY CORPORATION



Dated: November 12, 1998               By:  RICHARD T. SPERBERG       
                                            -------------------------------
                                            Richard T. Sperberg
                                            Chief Executive Officer (Principal
                                            Executive Officer) and Interim Chief
                                            Financial Officer
                                            (Principal Accounting and Financial
                                            Officer)