In front of the Plug Power Inc. building in Latham rests a ghost of the company's past strategy and a symbol of its future hopes.
  
The hydrogen-fed fuel-cell generator powers a faux living room in Plug's lobby. In the company's early days, the plan was to change the world by providing such clean-energy machines to every home.

Though he doesn't like to admit it, President and Chief Executive Roger Saillant had to do a little painful truth-telling when he took the reins in 2000. Plug's ambitions were ahead of the market and the technology. "I actually wrote on a blackboard, 'Let's face it: They cost too much, and they don't work,' " he said in an interview.

Under Saillant's leadership, the company has changed direction, shifting from ambitious to realistic, from selling to everybody to selling to a tightly focused market.

Plug took apart its fuel-cell generator, GenSys, which takes natural gas, processes out the hydrogen, then uses the hydrogen in a chemical reaction that makes electricity. It created GenCore, which leaves out the natural gas part, and costs about half as much. The company is marketing it as a $15,000 backup power alternative for out-of-the-way cellphone towers.

This quarter, company executives are participating in three large events -- a German trade show, the U.S. Hydrogen Conference and the Smith Barney Citigroup 2004 Small & Mid-Cap Conference -- part of the company's continuing efforts to communicate the strategic shift and move toward profitability.

"We have to convince them that the market is large enough that if we get a small fraction of it, that we can be profitable," Saillant said. Mass-market products are still part of the plan, but there must be intermediate steps first, he said.

That kind of rejiggering isn't unusual in the industry, some say.

"Taking those technologies and putting them into commercially viable packages has turned out to be an extreme challenge," said Wayne Gardner, vice president of Franklin Fuel Cells Inc., an early-stage development company based in Wayne, Pa.

In the late 1990s, many upstart energy companies went down the "soup-to-nuts" path, he said, thinking they could do everything -- only to realize how much time and money it would take to build up their infrastructure and business.

Plug hasn't made a profit since it was founded in 1997 by Mechanical Technology Inc. of Albany and DTE Energy Co. of Detroit. And its stock has bounced dramatically -- up to about $150 in early 2000 and dipping below $4 late last summer. Monday, it closed at $9.09.

But losses declined over time. In 2000, Plug lost $86.2 million, or $ 1.99 a share. Last year, it lost $53 million, or 88 cents a share.

Plug will release first-quarter results on Wednesday.

The strategy looks to be paying off, in some ways.

Saillant, who speaks in the measured-yet-authoritative tones of a man leading a meditation, recalls going out to talk to investors when he first got to Plug. Out of nearly 150 potential investors, 11 put money in. Last fall, when he was shopping private placements around, he talked to 30 investors, about 25 of whom bought stakes in Plug.

"I think they are going down the right path and taking the right strategy here," said Eric Prouty, an analyst for Boston-based investment bank Adams, Harkness & Hill Inc. "But people need to realize that this isn't going to be a hockey stick. It's going to take time for people to develop."

Plug is trying to drive down the price of its generators, Prouty said. And that means selling more of them.

Some analysts have expressed doubts about the company for the short term, but that's not a range that Saillant is looking at, he said. He's proud that, on average, Plug's individual shareholders are small. According to his calculations, they own an average of just 350 shares each. He feels a tremendous responsibility to them, he said.

"In my view, you don't divide strategy and ethics," Saillant said. "When ... you're a lonely little cork on an ocean of waves, you've got to have the ability to stay focused on your internal gyroscope. Or you can lose your way in a hurry."

As of year-end 2003, Plug had 20 GenCore units installed around the world. An updated number will be available when the company has its quarterly earnings call Wednesday.

"People buying these, I'd say, are kicking the tires of the new technology," Prouty said. "The next step is, can (Plug) make a really firm believer out of any of these users. That's what we're keeping our eye on, early-user feedback."

It's probably too early to tell, he said.

The new numbers may be the only big news that comes out this week, Saillant said.

"I think only the really astute people will know we're making progress," he said.