Power Efficiency Corporation Signs Contract for Energy Efficiency Aggregation with Major California Utility

Aggregation Contract for up to 3.2 Million kWh for Power Efficiency’s Motor Efficiency Controller on Various Applications

March 17, 2008 - Las Vegas, NV – Power Efficiency Corporation (OTCBB: PEFF.OB), a green energy company focused on efficiency technologies for electric motors, announced today that a major California utility has awarded the Company a contract to aggregate up to 3.2 million kWh of electricity in the utility’s service territory.

The efficiency aggregation contract, much like other efficiency financing measures, is designed to promote the purchase and installation of efficiency equipment such as Power Efficiency’s motor efficiency controller (MEC) with E-Save Technology™. Under the terms of this specific aggregation contract, the utility pays Power Efficiency, as opposed to the customer, a set rate per kWh of energy saved in the first year of operation of the MEC. The rate per kWh is competitive with prevailing electricity rates in California. This incentive financing enables Power Efficiency to competitively price the MEC to customers, resulting in improved rates of return and paybacks for customers.

Potential applications for the MEC under the aggregation contract include escalators, crushers, granulators and other industrial applications with constant speed motors running at less than full load.

“We are very pleased to be awarded this contract and to be working closely with another major utility to improve the energy efficiency of their customers. Programs such as this one benefit rate payers, the utility and the environment. Furthermore, it will assist our sales efforts. Energy efficiency is the greenest and frequently the most economical “source” of energy, and we see more and more utilities and potential customers turning toward efficiency measures,” said Steve Strasser, Chairman and CEO of Power Efficiency. 

About Power Efficiency Corporation
Power Efficiency Corporation is a green energy company focused on efficiency technologies for electric motors.  Power Efficiency is incorporated in Delaware and is headquartered in Las Vegas, Nevada.  The Company has developed a patented and patent-pending technology platform, called E-Save Technology™, which has been demonstrated in independent testing to improve the efficiency of electric motors by up to 35% in appropriate applications. Electric motors consume over 25% of the electricity in the U.S. and many operate inefficiently.  E-Save Technology™ can be licensed to motor, controls and equipment manufacturers. Power Efficiency’s first product based on E-Save Technology™ is a Motor Efficiency Controller for applications such as escalators, crushers, granulators, mixers, saws and MG elevators. Power Efficiency is also developing a new product based on E-Save Technology™ for the tens of millions of small motors found in applications such as residential air conditioning, pool pumps, and clothes dryers. The company is working with manufacturers to incorporate this technology directly into new motors and appliances.

For more information go to www.powerefficiency.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 SEC Filing. Power Efficiency assumes no obligation to update the information in this release.

Contact:
B.J. Lackland, CFO, 702-697-0377
Kenneth Munson, VP Sales and Marketing, 702-697-0377
Andrew Barwicki, Investor Relations, 516-662-9461