But unlike some tech firms going the green route, including nearby Google GOOG, Fujitsu didn't go with solar or wind power. It chose ... fuel cells.

A stationary fuel cell system, Fujitsu says, is more dependable than solar or wind energy, and needs less space.

"The fuel cell was a much better option for us," said Richard McCormack, a senior vice president of marketing at Fujitsu. "(Solar and wind) only work at certain times."

He also says it's easier to install than solar or wind systems. But what also helped the project were government incentives. Government grants remain key because, in general, fuel cells cost more than conventional energy.

This isn't the same fuel cell technology that's used in cars. Stationary fuel cell systems can power businesses and homes. But it remains a young industry that's a fraction of the size of the solar or wind energy fields. The systems look like big, boxy transformers and many use hydrogen to build heat and energy.

Of the few publicly traded companies that deal solely with fuel cells, FuelCell Energy (NASDAQ:FCEL) FCEL is performing the best in the stock market. But some tech and industrial giants are also into fuel cells, including United Technologies (NYSE:UTX) UTX, Siemens (NYSE:SI) SI and General Electric (NYSE:GE) GE.

"The fuel cell market is certainly small," said Raymond James analyst Pavel Molchanov, "but it's promising and growing."

Sizing It Up

Clean Edge, a research firm focused on green tech, estimates worldwide fuel cell revenue of $1.4 billion in 2006, compared with $15.6 billion for solar and $17.9 billion for wind. But it expects fuel cell sales to hit $15.6 billion in 2016.

"Stationary fuel cells have kind of been humming along under the radar," said Clint Wilder, contributing editor of Clean Edge.

Stationary fuel cell systems will likely grow faster than car fuel cells, says Wilder. Getting the technology right for a big industrial fuel cell system is easier than cramming fuel cells into a vehicle, he says.

FuelCell Energy is one fuel cell firm that shows promise, though it has a long way to go to make good on that promise.

Before 2003, all of its revenue came from selling its fuel cell research, mostly to the government. Now, most of its revenue comes from product sales. For the quarter ended July 31, its sales rose 55% from the year-ago quarter to $13.5 million. Product backlog more than doubled to $49.6 million, the company said.

Ford Motor F, California wastewater treatment facilities and Pepperidge Farm, the snack maker, are among its customers. Ford uses FuelCell's products for its plants, not for its cars.

Fuel cells produce electricity and heat. Companies have started to use the systems to heat boilers.

Government incentives, though, have been needed to spark the fuel cell industry. California and Connecticut have rolled out special incentives that target fuel cells, one reason for Fujitsu's choice. Fuel cells also have government backing in South Korea.

Still, fuel cell system costs are falling. FuelCell Energy says manufacturing costs for a 2-megawatt system have fallen to $3,000 from $20,000 in 1997. Prices will continue to fall as bigger orders lead to the economies of higher-volume production.

Subsidies Could End

R. Daniel Brdar (pronounced Ba-dar), chief executive of FuelCell Energy, says the cost of his fuel cell systems could be even with conventional power grid energy in as soon as a couple of years. Then, fuel cell makers wouldn't need government incentives to compete.

But Brdar says he doesn't see solar and wind as rivals. Rather, he sees them as alternatives in the green energy push.

"We're really three legs of the stool," Brdar said.

FuelCell's stock has been volatile, but shares are up more than 40% in the last six months. The company hasn't made money and sales fell each year from 2003 through 2005 before rising 10% last year, to $33 million.

But Brdar says the company is ramping up fuel cell manufacturing capacity, which will get the company toward positive profit margins and cash flow.

Getting Their Piece

United Technologies, which installed the fuel cell system at Fujitsu in California, is another big player in the industry. It's working on both stationary and vehicle systems.

Homer Purcell, vice president of sales at United Tech's power unit, says the company is targeting areas of the country where electricity costs are high, such as California. The company won't give financial details, but Purcell says more companies are looking at fuel cell energy.

"We're seeing a significant increase in the number of calls," he said.

Germany's Siemens, which has a large wind-energy business, also sees opportunities in fuel cells.

It has begun research on fuel cell systems that could help supply energy at power plants.

The goal is to combine them with gas turbines, to cut the costs of producing power.

The company says construction of such a plant, though, won't begin until 2012. At that, it calls its timeline aggressive.

GE, which is sharing a Department of Energy fuel cell research grant with Siemens, sees opportunities with large-scale fuel cells as well.

GE is taking a somewhat different approach than Siemens to fuel cells that will take even longer to commercialize, but pay off with lesser costs for customers down the road, says Kelly Fletcher, sustainable energy for GE's global research unit. He expects commercialized products around 2015. He says GE, with some help from research grants, has spent about $100 million on fuel cell development.

"Our interest is at the power plant level," he said.