<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS OF ENVIRONMENTAL POWER CORPORATION FOR THE
THREE MONTHS ENDED MARCH 31, 1998.
</LEGEND>
       
                             
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-START>                             JAN-01-1998
<PERIOD-END>                               MAR-31-1998
<CASH>                                       2,427,007<F1>
<SECURITIES>                                         0
<RECEIVABLES>                               10,546,470<F2><F3>
<ALLOWANCES>                                         0
<INVENTORY>                                    580,488
<CURRENT-ASSETS>                             9,771,958
<PP&E>                                         247,599
<DEPRECIATION>                                 122,552
<TOTAL-ASSETS>                              53,073,368
<CURRENT-LIABILITIES>                        9,294,890
<BONDS>                                      4,076,546
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                        100
<COMMON>                                       125,254
<OTHER-SE>                                 (3,766,340)
<TOTAL-LIABILITY-AND-EQUITY>                53,073,368
<SALES>                                     12,178,487
<TOTAL-REVENUES>                            12,178,487
<CGS>                                        4,548,684
<TOTAL-COSTS>                                4,548,684
<OTHER-EXPENSES>                             6,037,834
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             119,392
<INCOME-PRETAX>                                984,593
<INCOME-TAX>                                   404,000
<INCOME-CONTINUING>                            580,593
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   580,593
<EPS-PRIMARY>                                      .05
<EPS-DILUTED>                                      .05
<FN>
<F1>CASH INCLUDES $617,826 WHICH IS RESTRICTED IN USE.
<F2>RECEIVABLES INCLUDES $3,838,233 WHICH IS NONCURRENT.
<F3>RECEIVABLES INCLUDES $3,802,450 WHICH IS SUBJECT TO A LITIGATION.
</FN>