Telkonet Sells Telkonet iWire System(TM) To US Utility for Substation Automation and Monitoring

Monday July 24, 9:00 am ET
GERMANTOWN, Md.--(BUSINESS WIRE)--July 24, 2006--Telkonet, Inc. (AMEX:TKO - News):
Pilot Program Results in Sale
Telkonet iWire System Works in DC Environment in Addition to AC
Global Spending on Substation Automation $500 Million Annually,
Market Potential $40 Billion



Telkonet, Inc. (AMEX:TKO - News), the leader in providing in-building broadband access over existing electrical wiring, today announced that it has sold the Telkonet iWire System to a major US utility as the result of a successful early completion of a pilot project for substation automation and monitoring.

Ron Pickett, President and CEO of Telkonet, said, "This initial sale marks the opening of an entirely new market for Telkonet, and for our newly launched Telkonet Energy Services (TES) division. Our Telkonet iWire System not only can provide Internet access over powerlines to hotels and multi-dwelling residences, but it is so robust that it can also provide energy data, energy management and energy market participation abilities to residential, commercial and power generating properties nationwide. This first sale proves the value of our Telkonet iWire System to utilities around the world."

He added, "The average substation tends to be small with ten to twenty endpoints. However, there are some 70,000 substations in North America alone. We believe, therefore, that revenues from this market will be generated in the future from numerous individual locations."

The sale stemmed from an introduction a marketing partner of Telkonet's made on the Company's behalf to the utility. Recently, the utility took delivery of the Telkonet iWire System for a live test under the terms of a one-month trial agreement. The utility opted to purchase the system before the trial agreement expired.

During the testing, Telkonet proved that the Telkonet iWire System operates in a direct current environment as well as the alternating current environment, where customers have previously deployed it. This capability means that the system could have additional applications.

Newton-Evans Research Company estimates the current annual global spending for substation automation and integration programs at about $550-600 million, with an overall potential market size of nearly $40 billion. The Newton-Evans year-end 2005 study has found that 76% of the North American utility respondents indicated having a substation automation and integration strategy in place.

Pickett concluded, "Over the past twelve months, Telkonet has been and continues to be engaged in numerous pilot projects of this nature in such fields as residential and commercial real estate power management, cable TV, homeland security, and defense contractors among others. As these projects come to fruition and as orders stemming from them arrive, we expect to continue to make announcements."



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