Power Efficiency Corp. Announces Successful Trials of New Energy Efficiency Technology Targeting Motors in Appliances and Light Commercial and Industrial Equipment

New Digital Technology Achieves Over 30% Energy Savings; New Provisional Patent Filing Anticipated

LAS VEGAS--(MARKETWIRE)---Power Efficiency Corporation (OTCBB: PEFF), a developer and manufacturer of advanced energy savings technologies for electric motors, today announced it has successfully completed internal tests of a new microprocessor-based technology for reducing the amount of electricity used by single phase alternating current induction motors. These motors are typically found in home appliances, shop tools, and light commercial and industrial equipment. These motors waste electricity when they are lightly loaded.

The Company plans to market this technology primarily through sales and licensing agreements with manufacturers of refrigerators, shop tools, vending machines and residential air conditioning. The Company expects to move into application-specific testing with independent verification soon. The Company has begun initial discussions with companies in these sectors about testing the new technology on their equipment with the intention of selling products or licensing the technology on a mass scale.

“With this new technology, Power Efficiency Corporation is targeting the large market of home appliances and light commercial and industrial equipment,” said Steven Strasser, Power Efficiency’s Chairman and CEO. “For example, in 2005 there were over 14.5 million residential air conditioners and 13.5 million refrigerators and freezers sold in the U.S. alone. Worldwide, this is an even larger market.

“Historically, energy efficiency measures for appliances have focused on other areas, such as the seals, insulation and lighting in a refrigerator. But the compressor motor uses the most electricity. We believe our digital controller may be the simplest and most cost-effective technology to reduce the energy consumed by many of the appliances.”

The Company’s new technology attacks the energy wasted by lightly loaded motors, the same inefficiency overcome by the Company’s existing technology. However, the new technology, based on a new algorithm run by software on a microprocessor, reduces this inefficiency through an approach that is more suitable for single phase motors. The Company believes this new approach is a unique breakthrough and expects to file an additional provisional patent on the new technology in the coming months.

Test Results:

• Electric Motor at No Load: Over 30% energy savings

• Electric Motor at 40% of Full Load: Over 20% energy savings



Test Equipment:

• Make and model of electric motor: Baldor Electric Company L3501 single-phase, 1/3 HP, general purpose, capacitor-start motor powered by 120 volts

• Typical motor applications: Per Baldor Electric Company literature, this motor is typically used for compressors, pumps, fans, farm equipment, conveyors, material handling equipment, machine tools and other applications

• Load Equipment: Load was applied to the motor using two Magtrol, Inc. Hysteresis Dynamometers, Model HD-510 and Model HD-810