March 30, 2007

Power Efficiency Corporation Reports Successful Tests of New Digital Motor Efficiency Controller for Small Motors in Appliances

Technology Based on New Inventions in Recent Patent Filings

LAS VEGAS--(BUSINESS WIRE)---Power Efficiency Corporation (OTCBB: PEFF), a developer and manufacturer of advanced energy savings technologies for electric motors, today announced the results of tests of its new digital single phase motor controller on two commonly used commercial electric motors. The test was conducted by Yahia Baghzouz Ph.D., P.E., who is a Technical Advisor to Power Efficiency Corporation. Dr. Baghzouz is a professor of electrical engineering at the University of Nevada, Las Vegas and is the Co-Director of the UNLV Center for Energy Research.

The purpose of the test was to determine the energy savings achieved with Power Efficiency’s new digital single phase motor controller prototype. Single phase motors are typically found in residential and light commercial appliances, such as pool pumps, refrigerators, clothes dryers, heat pumps and other applications. Power Efficiency conducted this test in anticipation of efforts to enter co-development and sales arrangements with motor and appliance manufacturers.

“We are very pleased with the results of the test conducted by Dr. Bagzhouz”, said Steven Strasser, the Company’s Chairman and CEO. “We are presently manufacturing a number of prototypes and are in discussions with several large motor and appliance manufacturers who are waiting to receive our prototype to commence their own testing and evaluation. If the evaluations by these potential customers are positive, we expect to enter co-development arrangements for including our controller as a standard component on motors in various applications.

“This market represents a significant revenue opportunity for the company because there are over a hundred million single phase motors sold every year in the U.S. Furthermore, efficiency standards are becoming increasingly stringent for appliances and other equipment powered by single phase motors. Our goal is to have the most cost-effective technology for appliance and motor manufacturers to meet these standards.”

Test Results:
Test on a 1/3 HP Emerson split-phase motor:
• At 30% of full load, energy savings were 41%
• At 50% of full load, energy savings were 24%

Testing on a 3/4 HP Baldor capacitor-start motor:
• At 30% of full load, energy savings were 22%
• At 50% of full load, energy savings were 8%

About Power Efficiency Corporation
Power Efficiency Corporation develops and markets advanced energy saving technologies for electric motors. The Company’s first product is an energy saving soft start. The product gradually brings an electric motor from rest to full speed. Once at full speed, the Company’s patented technology works like cruise control for a car; it delivers the motor just enough electricity to maintain a constant operating speed, whether the motor is heavily or lightly loaded. The technology saves energy on motors found in applications such as escalators, elevators, grinders, granulators, mixers, saw mills and more. Energy savings from these controllers is typically 20-40% in appropriate applications. The controllers also reduce the operating heat of the motor, producing significant motor life extension and downtime reduction benefits. Power Efficiency’s products are CE Marked and CSA certified. The Company is also developing products to reduce the amount of electricity used by appliances and light commercial equipment, such as refrigerators, residential air conditioning and shop tools. For more information visit www.powerefficiencycorp.com

As a cautionary note to investors, certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company's products in the market; the Company's success in technology and product development; the Company's ability to execute its business model and strategic plans; and all the risks and related information described from time to time in the Company's SEC filings, including the financial statements and related information contained in the Company’s 2005 Annual Report. Power Efficiency assumes no obligation to update the information in this release.

Contact:
Power Efficiency Corporation
Investor Relations:
B.J. Lackland, 702-697-0377
Chief Financial Officer
blackland(at)powerefficiencycorp.com