The unit, which would make hydrogen using either electricity or sunlight, would help sidestep one of the most vexing problems surrounding the creation of the pollution-free, alternative-power cars: how to persuade oil companies to invest in expensive new hydrogen stations that would compete with their core product, gasoline.

The automaker's goal is an affordable, compact unit that would allow customers to fill their cars overnight in their own garages, says GM spokesman Scott Fosgard.

GM would join Honda, which has already created a model for a home refueling hydrogen unit.

Home refueling makes the possibility of fuel-cell cars "much more real," especially since building hydrogen fueling stations would be a "massive undertaking," says Ron Cogan, publisher of the Green Car Journal.

GM is starting to seriously plan a business case for hydrogen vehicles, which up to now has been a long-range research project eclipsed by more market-ready fuel-saving alternatives, such as gas-electric hybrids.

Next year, GM plans to put 100 hydrogen fuel-cell versions of its Chevrolet Equinox SUV into the hands of consumers — from teachers to government officials — in Washington, D.C., California and New York.

And Vice Chairman Bob Lutz recently predicted that GM fuel-cell-powered vehicles could go on sale in as few as five years from now, beating previous forecasts by a decade.

He said fuel cells could create a new golden age for GM hearkening back to the 1950s and 1960s.

Fueling is a problem. California, with the most hydrogen filling stations of any state, has just 23 and another 15 on the drawing boards. Even GM's oil company partner, Shell, has immediate plans for only six, two outside New York and four on the drawing board in Los Angeles.

One big reason: expense. Shell's only existing hydrogen filling station, in the Washington, D.C., area, cost $2 million.

As for how many it eventually might build, "We haven't hung numbers on it," says Shell Hydrogen's Tim O'Leary.

GM isn't alone in home refueling. Honda unveiled the third generation of its home unit last year, created in conjunction with a fuel-cell company called Plug Power. It produces enough hydrogen from natural gas to power both a car and a home.

Honda also has a solar-powered refueling station in operation at its test center in Torrance, Calif. It makes enough hydrogen for 30 miles of driving a day.

Honda today demonstrated its next-generation hydrogen car in Japan. Honda says its new FCX, with a smaller, lighter fuel cell, has a range of more than 270 miles. It's due to arrive in the USA in 2008. Honda has 15 current-generation FCXs being tested by consumers.

Other automakers have hydrogen programs as well, but aren't as far along.