Power Efficiency Corporation Reports 2007 Financial Results

 CEO Discusses 2007 Accomplishments and 2008 Goals

March 25, 2008 - Las Vegas, NV – Power Efficiency Corporation (OTCBB: PEFF.OB), a green energy company focused on efficiency technologies for electric motors, announced today its financial results for the year ended December 31, 2007 on Form 10-K.

“This year held many important developments for our company,” said Steven Strasser, Chairman and CEO of Power Efficiency. “We made great strides in many areas of the business in 2007 and I expect us to make great progress in 2008.”

Regarding specific developments in 2007, the Company noted the following:

Revenue

• Increased 160% over 2006 and included sales to several notable customers, including the Denver International Airport, Los Angeles Metropolitan Transit Authority and Westfield Malls
• Generated a gross margin of over 30%
• Entered negotiations and testing with numerous OEMs for adoption of the three phase, industrial Motor Efficiency Controller on a volume basis
• Commenced development of a proprietary prototype product for a multinational OEM in the elevator/escalator industry
• Initiated testing with a large motor manufacturer for small motors (single phase) such as those found in many appliances and light commercial equipment

Utility Programs & Testing

• Several programs started with electric utilities, including Southern California Edison, Nevada Power and Sierra Pacific
• Testing and rebates approved by other utilities, such as Excel Energy in Denver and the Los Angeles Department of Water and Power

Product & Technology Development

• First generation digital unit commercialization, including completion of development and certification
• 4 provisional patents and 1 utility patent filings completed
• Enhanced engineering capabilities with the addition of 4 engineers and the opening of a technology development center in Las Vegas

Manufacturing

• Signed an agreement with a global contract manufacturer for high volume unit production and scalability, and commenced production
• Created light in-house manufacturing capability by opening a manufacturing facility in Las Vegas for the production of lower volume units

Capitalization

• Completed a preferred stock financing and repaid all outstanding debt
• Ended the year with over $5 million in cash and no outstanding debt

Looking forward to 2008, Strasser commented, “We believe the market for energy efficiency technologies continues to improve for a host of reasons, from increasing energy prices to environmental and national security concerns.  In fact, we see a heightened focus on the need for greater electric motor efficiency because motors use such a large percentage of the electricity generated in the United States and are frequently operating very inefficiently.”
 
“I am very optimistic about the Company’s prospects and opportunities in 2008. We are highly focused on an increasing number of large opportunities in front of us, from sales to large end-users to agreements with original equipment manufacturers. I expect to see several of these opportunities to come to fruition in 2008, with more in 2009 and beyond.”

“We are aggressively pursuing OEMs for both the three phase product, which applies to industrial motors, and the single phase product for motors in appliances and other light commercial equipment.”

“We are also pursuing the European market and have recently engaged a sales and marketing representative based in Italy. We have already identified several large sales opportunities in Europe and are working vigorously to bring them to a successful close.”

Summary 2007 Financial Results:
Total Sales: $490,510
Total Gross Margin (and % of sales): $150,042 (30.6%)
Net Loss: $3,891,795
Net cash used for operating activities: $2,850,927
Non-cash compensation and interest expense: $1,075,251

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