Echelon Broadens Power Line Technology Suite to Meet the Needs of Low Cost, Consumer-Installed Home Automation Systems

(San Jose, California – August 9, 2005) - Echelon Corporation (NASDAQ: ELON), a pioneer in control networking, and the world's leading supplier of technology for the widely-used LonWorks® control networking platform, today announced that it has broadened its market-leading power line technology in order to significantly expand the number and types of applications under which existing electrical wiring is used for control networks. These enhancements represent a major step forward in the usefulness, cost-effectiveness, and ease of use of power line technology for control network applications. Collectively, they lay the groundwork to expand the home automation industry from a niche to a mass market.

"We're seeing an impressive increase in design-wins with our power line smart transceivers in applications ranging from street lighting to truck controls to home appliances," said Anders Axelsson, Echelon's senior vice-president of sales and marketing. "Our customers have told us that our power line technology and tools are delivering what RF (radio frequency) proponents claim to have but cannot deliver – very low cost, reliable and easy to use control networks that require no new wires. And we have something no other suppliers can claim – outstanding reliability based on a track record of tens of millions of devices already installed and working around the world."

The new technologies include the second-generation of Echelon's patented "switched-leg" technology that makes power line communications reliable in 100% of homes, new Interoperable Self-Installation (ISI) software that allows end-users to configure two or more products by simply plugging them into the wall, and two new rapid design tools - the Mini EVK for testing and software development and the PL DSK (Rev 2) for developing hardware using Echelon's power line technology. As a result of rising volume and design wins, Echelon also lowered the price of its market-leading PL 3120® and PL 3150® Power Line Smart Transceivers, further boosting the attractiveness of its power line solutions.

New Echelon "Switched Leg" Technology
Most electrical devices require an electrical connection consisting of both Line and Neutral wires in order to operate; the "Line" wire provides the source of electrical current, and the "Neutral" wire provides its return path. In most lighting circuits, however, the Line wire (or "leg") is first routed through a wall switch or dimmer before being connected to the light, while the Neutral wire is present only at the light fixture itself. This wiring style is called "switched-leg."

For designers of home automation products, the lack of a Neutral wire at the switches and dimmers has made it impossible to locate control devices at these locations. The traditional way of overcoming the lack of a Neutral wire was to tear into walls and rewire the circuit. Attempts to design two-way control devices that can be wired into a switched leg have heretofore been unsuccessful. Echelon's first-generation switched-leg technology enabled communications over switched-leg circuits using only incandescent lights, while fluorescent lamps remained a technical challenge. Echelon's new technology for the first time allows reliable, bi-directional communications in a switched-leg circuit with incandescent, halogen, or fluorescent lamps.

"Echelon's new switched-leg technology will allow us to add multi-room heating control to homes and apartments, without requiring any new wiring and without the reliability problems of RF technology," said Mr. Ho Jin Ryu, Business Development Manager of KyungDong Network Co., Ltd., Korea's market leader in boiler controls. According to Mr. Ryu, before Echelon's breakthrough, the consumer would have to call in an electrical contractor to run new wiring to each room - an expensive and disrupting situation. Mr. Ryu said, "Now the consumer or contractor will be able to simply replace the existing light switch with a KyungDong integrated light switch and thermostat. This significantly reduces installation costs and time, provides greater convenience to the consumer, and offers greatly improved aesthetics."

New ISI Technology
Reflecting a breakthrough in simplicity and ease-of-use, Echelon's new ISI technology makes adding multi-zone lighting, multi-zone heating control, and pool/spa controls as simple as plugging in a power cord. Devices equipped with ISI software are ideally suited to the home environment because they do not need specialized software or programming to work. As soon as power is applied or a "service" function is activated, the devices discover one another and configure themselves into fully functional control systems. System changes, such as the addition of a new device or changing a lighting scene, can take place at any time without any expertise or training on the part of the user.

Enhanced Design Tools
Echelon's new rapid design tools are intended to significantly expand the base of customers using Echelon's power line technology by accelerating the process of evaluating, designing, and shipping products based on Echelon's PL 3120 and PL 3150 Power Line Smart Transceivers. The new Mini PL EVK is an ultra low-cost development and evaluation tool for engineers who wish to evaluate Echelon's power line technology and/or develop simple devices. Engineers can initialize and run a power line based network in as little as five minutes after opening the product packaging, and can start writing new application code shortly thereafter. The PL DSK includes reference schematics, PCB layout files, bills of material, and sample ICs for developing hardware using Echelon's power line technology. By offering reference designs, the process of creating new products based on power line technology can be compressed to a matter of days.

Price Reduction Driven By Rising Shipment Volume
As a key part of making this technology broadly available for home automation markets, and based on the rising volume of product shipments, Echelon has reduced the price of its power line smart transceiver family by 10%. The price reduction has made Echelon's power line solution extremely cost-effective for use in white and brown goods, light switches and luminaires, audio/video home theatre controls, smoke and gas detectors, irrigation controls and timers, and pool/spa controls. According to Echelon's Axelsson, "This is all part of a concerted strategy to lower the cost of product design, development, and production for companies interested in building control networks into everyday devices."

More information about power line control networking can be found at http://www.echelon.com/products/oem/transceivers/smartpl/default.htm.

About Echelon Corporation
Echelon Corporation (NASDAQ: ELON) is a pioneer and world leader in control networking – networks that connect machines and other electronic devices – for the purpose of sensing, monitoring and controlling the world around us. Echelon's component and system-level hardware and software products are used by OEMs, VARs, system integrators, utilities – and virtually every class of institution – to design, build, deploy and/or operate robust, scaleable, standards-based control networks and devices. Echelon technology can be found in thermostats, light switches and controllers, electricity meters, appliances, heating and air-conditioning systems, traffic signals, trains, aircraft, factories, and buildings – in more than 50 million "smart" devices made by thousands of manufacturers.

Echelon is also the creator of the LonWorks platform, an extremely robust, flexible, and expandable standards-based control networking platform upon which manufacturers can build products and applications with unparalleled reliability, security, operational integrity, flexibility, and bottom-line value. The worldwide adoption of the platform prompted the formation of LonMark® International, an independent trade organization that certifies LonWorks based products against an interoperability specification that allows devices from differing manufacturers to work together; educates the market about the value of device interoperability and open control networks; and creates awareness programs for potential end-users, OEM manufacturers, and integrators of LonMark certified products and LonMark systems. For planners, system architects, or OEM designers of control network products and families there is no better choice than Echelon.

Echelon is a co-organizer of the LonWorld® 2005 Exhibition and Conference in Paris, France on October 20-21, 2005. Information about the LonWorld event may be found at http://www.lonworldexpo.com.

Echelon is based in San Jose, California, with international offices in China, France, Germany, Italy, Hong Kong, Japan, Korea, The Netherlands, and the United Kingdom. Further information regarding Echelon can be found at http://www.echelon.com.

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Echelon, LonWorks, 3120, 3150, LonWorld, LonMark, and the Echelon logo are registered trademarks of Echelon Corporation registered in the United States and other countries.

This press release may contain statements relating to future plans, events or performance. Such statements may involve risks and uncertainties, including risks associated with the ability of Echelon's power line smart transceivers to achieve design wins, and for those design wins to result in orders, and the ability of Echelon's power line smart transceivers and interoperable self-installation technology to perform as designed; risks associated with uncertainties pertaining to the timing and level of customer orders, demand for products and services, development of markets for Echelon's products and services; and other risks identified in Echelon's SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Echelon undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact Information

Press Contact:
Julia O'Shaughnessy Echelon Corporation 408-938-5357 joshaughnessy@echelon.com	Abigail Johnson/Paul Michelson Roeder-Johnson Corporation (650) 802-1850 http://email.roeder-johnson.com

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