U.S. SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C.  20549

                                  FORM 10-QSB


(Mark One)
<checked-box> QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998.

<square> 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 incorporation or organization)    (I.R.S.
                                                  Employer Identification No.)


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


Issuer's telephone number, including area code:  (760) 931-2400


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>

                           Onsite Energy Corporation
                     Condensed Consolidated Balance Sheet
                                March 31, 1998
                                  (Unaudited)


Current Assets:
    Cash                                                    $       511,897
     Cash -Restricted                                               152,925
     Accounts receivable, net of allowance for doubtful
      accounts of $15,030                                         4,830,298
     Costs and estimated earnings in excess of billings
      on uncompleted contracts                                    1,173,637
     Inventory                                                      110,273
     Other assets                                                    96,857
                                                                 ----------
           TOTAL CURRENT ASSETS                                   6,875,887

Cash-restricted                                                      78,990
Costs incurred on future projects                                    80,215
Property and equipment, net                                         809,368
Goodwill, net of amortization of $1,611,472                         364,884
Other                                                                24,478
                                                                 ----------
           TOTAL ASSETS                                      $    8,233,822
                                                                 ==========
    LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                           $    3,203,140
  Current portion of notes payable                                   75,572
  Accrued expenses and other liabilities                            837,381
                                                                 ----------
          TOTAL CURRENT LIABILITIES                               4,116,093
                                                                 ----------
Long-Term Liabilities:
  Accrued future operation and maintenance costs
  associated with energy services agreements                        421,432
                                                                 ----------
          TOTAL LIABILITIES                                       4,537,525
                                                                 ----------
Commitments and contingencies                                           -

Shareholders' Equity:
  Preferred Stock, Series A, 4,000 shares authorized,
    none issued and outstanding                                         - 
  Preferred Stock, Series B, 625,000 shares
    authorized, none issued and outstanding                             -
  Preferred Stock, Series C, 1,000,000 shares authorized,
    203,250 issued and outstanding                                      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                         15,510
    Class B common stock, 1,000 shares authorized,
    none issued and outstanding                                         -
  Additional paid-in capital                                     20,709,567
  Accumulated deficit                                           (17,028,983)
                                                                 ----------
         TOTAL SHAREHOLDERS' EQUITY                               3,696,297
                                                                 ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                    $    8,233,822
                                                                 ==========


The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE>
                           Onsite Energy Corporation
                Condensed Consolidated Statement of Operations
                                  (Unaudited)

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

Revenues           $    5,401,634  $  1,646,305  $ 11,345,548  $  7,892,695

Cost of sales           4,154,730     1,322,262     8,296,595     5,782,767
                      -----------    ----------    ----------    ----------
    Gross Margin        1,246,904       324,043     3,048,953     2,109,928
Selling, General,
  and Administrative
  Expenses              1,029,331       785,912     2,458,356     2,699,303
Depreciation
  & Amortization          148,552        71,173       407,657       360,656
                      -----------    ----------    ----------    ----------
   Operating income (loss) 69,021      (533,042)      182,940      (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)
                      -----------    ----------    ----------    ----------
Income (loss) from operations
  before provision(benefit)
   for income taxes        25,010      (998,757)      138,156    (1,509,200)
Provision (benefit) for
   income taxes             4,438           -          16,675          -
                      -----------    ----------    ----------    ----------
Net income (loss)     $    20,572    $ (998,757)    $ 121,481   $ 1,509,200)
                      ===========    ==========    ==========    ==========
Basic and Diluted income
  (loss) per Class A
  common share        $      **      $    (0.09)    $    **     $     (0.14)
                      ===========    ==========    ==========    ==========

**Less than $ 0.01 per share


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

<PAGE>
                           Onsite Energy Corporation
                Condensed Consolidated Statement of Cash Flows
                                  (Unaudited)


                                                     Nine Months Ended
                                                          March 31,
                                                    1998            1997
                                                ___________     ____________

Cash flows from operating activities:

Net income (loss)                               $  121,481    $  (1,509,200)

Adjustments to reconcile net income (loss)
   to net cash used in operating activities:
       Amortization of goodwill                    278,139          300,000
       Inventory                                  (110,273)            -
       Amortization of acquired contract costs     192,061          386,773
       Provision for future operation and
         maintenance costs                            -              54,256
       Depreciation and amortization               129,518           60,656
       Loss on disposal of partnership interest      -              425,640

Change in operating assets and liabilities:
       Accounts receivable                      (3,447,315)          19,545
       Increase (decrease) in billings related
        to costs and estimated earnings on
        uncompleted contracts                   (1,222,752)       1,039,531
       Amounts due pursuant to sale of subsidiary    -             (421,834)
       Other assets                                (76,806)          65,696
       Cash-restricted                              41,252         (272,592)
       Accounts payable and accrued expenses     2,522,955       (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 (used)
         by 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 (used) by
           financing activities                  1,884,340         (587,134)
                                                ___________     ____________
       Net increase (decrease) in cash             (14,997)        (722,844)

Cash, beginning of year                            526,894          976,470
                                                ___________     ____________
Cash, end of quarter                        $      511,897     $    253,626
                                                ===========    =============


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

<PAGE>
                           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  ("Onsite")  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
            Onsite.   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 forthcoming year.


            **The remainder of this page left intentionally blank**

<PAGE>
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, 1997 were anti-dilutive
            and excluded in the earnings per share computation.

                           Onsite Energy Corporation
                              Earnings per Share
                                  (Unaudited)

                                 Three Months Ended       Nine Months Ended
                                     March 31,               March 31,
                                 1998         1997       1998        1997
                              ---------  ------------ --------- -----------
      BASIC EARNINGS PER SHARE:

Net income (loss)             $  20,572  $  (998,757) $ 121,481 $(1,509,200)

Less-Preferred Stock Dividends    4,955         -         8,374        -
                              ---------  ------------ --------- -----------
   Net Income (Loss) applicable
     to common shareholders    $  15,617 $  (998,757) $ 113,107 $(1,509,200)
                              =========  ============ ========= ===========
Weighted average number of
   common shares              14,714,361  10,935,598 13,061,167  10,776,607

   Basic Earnings (Loss)
     per share                 $   **          (0.09) $  **           (0.14)
                              =========  ============ ========= ===========
      DILUTED EARNINGS PER SHARE:

Net Income from primary income
   per common share            $  15,617  $ (998,957) $ 113,107 $(1,509,200)

Add:  Preferred Stock Dividend     4,955        -         8,374       -
                              ---------  ------------ --------- -----------
   Net Income for diluted earnings
      (loss) per share         $  20,572  $ (998,957) $ 121,481 $(1,509,200)
                              ---------  ------------ --------- -----------
Weighted average number of shares
   used in calculating basic earnings
   per common share           14,714,361  10,935,598 13,061,167  10,776,607

Add: Common stock equivalents  1,332,622       -      1,043,761      -
                              ---------  ------------ --------- -----------
Weighted Average number of shares
   used in calculation of diluted
   earnings per share         16,046,983  10,935,598 14,104,928  10,776,607
                              ---------  ------------ --------- -----------
     Diluted Earnings (Loss)
       per share             $    **  $        (0.09) $   **    $     (0.14)
                              =========  ============ ========= ===========
**Less than $ 0.01 per share

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

            In a related transaction on October 28, 1997, Onsite 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  a
            "tax  free"  exchange under Section 368 (a) (1) (B) of the Internal
            Revenue  Code  of   1986,   as   amended   (the  "Reorganization").
            Specifically,  Onsite  acquired  100 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 Onsite's  Class  A
            Common Stock,  par  value  $0.001 per share.  On or about March 31,
            1998, an additional 800,000  shares  of Onsite Class A Common Stock
            were delivered to Westar Capital based  on the execution of certain
            additional business contracts.  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
            Onsite,  and  has  legally  changed  its  name to  Onsite  Business
            Services, Inc.

            WBS provides performance contracting services, utility services and
            industrial  water  services  primarily  in the  states  of  Kansas,
            Missouri and Oklahoma.  The acquisition provides  Onsite  with  the
            ability to develop new markets in the Midwest and other areas.


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


                                Three Months Ended    Nine Months Ended
                                     March 31,              March 31,
                                 1998       1997        1998        1997
                              ---------  ----------   ----------    ----------
Revenues                     $5,401,634  $ 2,225,555  $11,944,216  $9,630,445

Income (Loss) from Operations$   69,021  $  (571,792) $   (35,728) $(1,066,281)

Net Income (Loss)            $   20,572  $(1,037,507) $   (97,187) $(1,625,450)

Basic and Diluted Income
   (Loss) Per Share          $     **    $     (0.07) $      **    $     (0.11)
                              =========  ============ =========    ===========
**Less than $ 0.01 per share



         **The remainder of this page left intentionally blank**
<PAGE>
NOTE 5:     On  or  about  May  19, 1998, Onsite entered into an Asset Purchase
            Agreement and an Employment and Noncompetition Agreement with SYCOM
            Enterprises, LLC ("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 Onsite, SYCOM
            ONSITE Corporation ("SYCOM ONSITE"), of all  of the assets, and the
            assumption of specific liabilities, of SYCOM LLC  in  exchange  for
            1,750,000  shares  of  Onsite's Class A Common Stock.  In addition,
            pursuant to the Employment  Agreement and Noncompetition Agreement,
            SYCOM ONSITE will retain the  services  of all of the employees of,
            and enter into a noncompete agreement with,  SYCOM  Corporation and
            SYCOM L.P. in exchange for non-dividend preferred stock  of  Onsite
            that is convertible into 15,750,000 shares of Onsite Class A Common
            Stock.   The  preferred  stock will be held in escrow until certain
            performance-related  conditions   are   met.    Onsite'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.



         **The remainder of this page left intentionally blank**
<PAGE>
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS.

BACKGROUND

Onsite  is  a  comprehensive energy services company ("ESCO") involved  in  the
development, engineering,  installation  and  operation  of energy projects for
industrial, commercial and institutional facilities. By combining  development,
engineering,  analysis,  project  management  and  financial management skills,
Onsite  provides  a  complete  package  of services, ranging  from  feasibility
assessment through construction and operation  for  energy  efficiency projects
incorporating lighting, energy management systems, HVAC upgrades,  cogeneration
and other energy efficiency measures. Onsite also provides comprehensive energy
supply  (natural  gas  and  electricity)  services to commercial and industrial
customers related to the evolving restructured  competitive  retail  market for
energy.

Unless  the context indicates otherwise, reference to Onsite 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
$11,345,548 compared to $7,892,695 for the nine months ended March 31, 1997, an
increase of $3,452,853 or 43.7 percent.  The increase in revenues was primarily
attributed to one larger sized  energy  efficiency contract in 1998, as well as
the addition of operating revenues from Onsite Business Services, Inc. ("OBS"),
which was acquired in October 1997.

Gross margin for the nine months ended March  31,  1998  was $3,048,953 or 26.9
percent of revenues, compared to $2,109,928, or 26.7 percent  of  revenues, for
the nine months ended March 31, 1997.  The modest increase in gross margin as a
percentage  of  revenues  was  the  result of a larger percentage of consulting
revenues, which generally provide higher gross margins.

Selling, General and Administrative ("SG&A")  expenses  were $2,866,013 for the
nine  month period ended March 31, 1998, compared to $3,059,959  for  the  nine
months  ended  March  31,  1997.   The  reduction of $193,946 or 6.3 percent is
attributable  to  the continued efforts by  Onsite  to  implement  savings  and
expense reductions in an effort to improve overall operating results.

Net other income/expense was $44,784 in other expense 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 net other  expense for the nine months ended
March  31, 1997, was a one time non-recurring loss  on  the  sale  of  Onsite's
interests in a cogeneration system of $425,240.

Net income  for the nine months ended March 31, 1998 was $121,481, or less than
$0.01 income 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  accrued  on  the  convertible Series C Preferred
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 $5,401,634 compared to $1,646,305 for the three  months  ended  March  31,
1997,  an  increase  of $3,755,329, or 228 percent. The increase in revenues is
largely due to one large  contract  signed  in  the  most  recent  quarter  and
revenues from OBS, which was acquired in October 1997.

Gross  Margin  was  $1,246,904,  or  23 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 on new contracts
and an increase in consulting revenue, which generally  provides  higher  gross
margin.

SG&A  expenses  were  $1,177,883  for  the  three  months ended March 31, 1998,
compared to $857,085 for the three months ended March 31, 1997.  The change was
attributable to the additional expenses acquired with OBS.

Net  other  income/expense was $44,011 in other expense  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  Onsite's  interest  in  a cogeneration
system.

Net income for the three months ended March 31, 1998 was $20,572,  or less than
$0.01  income  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.  Onsite'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 $2,759,794 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 transaction, including  the  sale  of securities,
with 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  costs and estimated earnings in excess of
billings on uncompleted contracts as it  relates  to  the  increase in accounts
payable.

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 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
Onsite'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 $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  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.



PART II - OTHER INFORMATION

Item 1.     Legal Proceedings - None
Item 2.     Changes in Securities - Not Applicable
Item 3.     Defaults upon Senior Securities - Not Applicable
Item 4.     Submission of Matters to a Vote of Security Holders - Not
            Applicable


Item 5.     Other Information

On or about May 19, 1998, Onsite entered into  an  Asset Purchase Agreement and
an Employment and Noncompetition Agreement with SYCOM  Enterprises, LLC ("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
Onsite, SYCOM ONSITE  Corporation  ("SYCOM  ONSITE"), of all of the assets, and
the assumption of specific liabilities, of SYCOM  LLC in exchange for 1,750,000
shares  of  Onsite's  Class  A  Common  Stock.  In addition,  pursuant  to  the
Employment Agreement and Noncompetition Agreement, SYCOM ONSITE will retain the
services of all of the employees of, and  enter  into  a  noncompete  agreement
with,  SYCOM  Corporation and SYCOM L.P. in exchange for non-dividend preferred
stock of Onsite  that  is  convertible into 15,750,000 shares of Onsite Class A
Common Stock.  The preferred  stock  will  be  held  in  escrow  until  certain
performance-related  conditions  are met.  Onsite'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.

With the exception of historical facts  stated herein, the matters discussed in
this  report  are  "forward  looking"  statements   that   involve   risks  and
uncertainties  that  could  cause  actual  results  to  differ  materially from
projected  results.  Such  "forward  looking" statements include, but  are  not
necessarily  limited  to, statements regarding  anticipated  levels  of  future
revenue and earnings from  operations  of  Onsite, projected costs and expenses
related to Onsite's energy services agreements,  and the availability of future
debt and equity capital on commercially reasonable  terms.   Factors that could
cause  actual results to differ materially include, in addition  to  the  other
factors  identified  in this report, the cyclical and volatile price of energy,
the inability to continue to contract sufficient customers to replace contracts
as they become completed,  unanticipated  delays  in  the  approval of proposed
energy efficiency measures by Onsite's customers, delays in  the receipt of, or
failure to receive necessary governmental or utility permits,  or approvals, or
the renewals thereof, risks and uncertainties relating to general  economic and
political conditions, both domestically and internationally, changes in the law
and regulations governing Onsite's activities as an energy services company and
the activities of the nation's public utilities seeking energy efficiency  as a
cost  effective  alternative  to  constructing new power generation facilities,
results of project specific and company  working  capital and financing efforts
and market conditions, and other risk factors detailed  in  Onsite's Securities
and  Exchange  Commission  filings  including  the  risk factors set  forth  in
Onsite's Registration Statement on Form S-4, SEC File 33-66010. Readers of this
report are cautioned not to put undue reliance on "forward  looking statements,
which  are,  by  their  nature,  uncertain  as  reliable indicators  of  future
performance. Onsite disclaims any intent or obligation to publicly update these
"forward looking" statements, whether as a result  of  new  information, future
events, or otherwise.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

a)    Exhibit

10.88 Performance Based Energy Savings Agreement dated March 31, 1998, between
      Onsite Energy Corporation and Unified School District No. 500, Wyandotte
      County, Kansas

10.89 Engineering, Procurement and Construction Agreement between Onsite Energy
      Corporation and Lighting Technology Services, Inc., dated as of March 31,
      1998

10.90 Engineering, Procurement and Construction Agreement between Onsite Energy
      Corporation and The Fagan Company, dated as of March 31, 1998

b)    Reports on Form 8-K

Form 8-K filed November 12, 1997, as amended on January 12, 1998, regarding the
private placement by Onsite Energy Corporation of its securities with Westar
Capital, Inc.

<PAGE>
                                  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:    MAY 20, 1998        By:    RICHARD T. SPERBERG
                                    Richard T. Sperberg
                                    Chief Executive Officer
                                    Chief Financial Officer