Eco smart overview-august 2012

Telkonet & EcoSmartLet Telkonet Help You Take Control.

August 2012

www.telkonet.com

Company ProfileTelkonet • EthoStream • EcoSmart

Clean Technology company with a focus on intermittently occupied spaces

Founded in 1999 • Headquartered in Milwaukee, Wisconsin

Major target markets include Hospitality, Education, and Military

EthoStream provides public access networking and high-speed Internet access solutions for nearly 5 million

users monthly at 2,400 locations.

EcoSmart offers a state-of-the-art energy management system designed for spaces with intermittent occupancy,

which integrates with other systems (e.g. BAS, PMS). EcoSmart is deployed in several hundred thousand rooms and

managed through a cloud-based monitoring network.

Publicly Traded: TKOI.OB

www.telkonet.com

Intermittently Occupied Spaces?Solution: Control the Unexpected with EcoSmart

What are intermittently occupied spaces?

Hotel rooms, college dormitories, military barracks, assisted living facilities, K-12 classrooms, etc.

Why is energy management a solution for intermittently occupied spaces?

Manually monitoring room temperature is practically impossible:

-Requires full participation of staff

-Requires room checks and occupant disruption

-Typically affects lighting and appliances as well

EcoSmart saves 20-40% of energy consumption and runtime.

Use occupancy-based energy management to control:

HVAC

Plug loads

Lighting

Shades

Appliances

A networked energy management system provides control through a web-based platform.

Demand Response Ready – reduce peak demand by 50% or more

Minimal impact on comfort and productivity

Designed for simplicity.

Flexible wired or wireless installation, simple to program and commission

Built-in measurement and verification

www.telkonet.com

2010 Electricity Rates in the U.S.U.S. Average Retail Price per kWh is 11.53¢

Highest Average Prices (per kWh):

Hawaii: 24.13¢

Connecticut: 18.67¢

New York: 17.05¢

Lowest Average Prices (per kWh):

Wyoming: 7.73¢

Idaho: 6.35¢

West Virginia: 6.63¢

Average Retail Price of Electricity to Ultimate Customers by End-Use Sector, by State, Year-to-Date through August 2010 and 2009Source: U.S. Energy Information Administration, Form EIA-861, *2010 Annual Energy Power Industry Report

www.telkonet.com

Energy Consumption in HospitalityRaise Your Energy Saving Expectations

Make an impact without the wait...

Together, the products in the EcoSmart solution reduce the amount of energy used to heat and cool unoccupied rooms. With ourinnovative technology, intelligent hardware, and remote management system, Telkonet provides an average decrease in energy consumption from 25% - 45%, with ROI typically achieved in 18-36 months. Many utilities have incentives and rebates which make these investments even more attractive.

*http://www.nationalgridus.com/

Water heating

Other

Cooking

Space heating

US Lodging:Natural Gas Use

Cooking

Cooling

US Lodging: Electricity Use

Other

Space heating

Office equipment

Ventilation

Refrigeration

Water heatingLighting

www.telkonet.com

Energy ManagementA Green Commitment to Your Valued Guests

Optimizing guest satisfaction, energy usage and green programs

• Your hotel and resort guests have increasing concerns regarding sustainability and energy efficiency. In fact, in a study appearing in the August 2011 issue of Cornell Hospitality Quarterly that examined responses from 571 business and leisure travelers, the most influential single attribute for hotel room preference was green certification.

• Informal surveys performed by Telkonet executives suggest only 15-25% of the hotels in the United States have an energy management system.

• Based on Telkonet’s experience gained from tracking occupancy patterns in several hundred thousand hotel rooms, a typical room is vacant 60% - 70% of a 24-hour day.

• An energy management system will not compromise guest satisfaction to reduce energy expenses. In fact, an energy management system has the power to improve the guest experience by:

Fulfilling guest expectations of comfort, safety, and satisfaction

Meeting the hotel management’s need for efficiency and reliability

Satisfying customers’ desire to buy from socially responsible and environmentally sensitive businesses

www.telkonet.com

Core StrategiesThink Green. Be Green. Get Green.

With an EcoSmart energy management system, energy savings is just the beginning...

The hospitality industry in the United States spends close to $7.5 billion on energy each year.* Given that energy costs will only continue to increase, reducing energy expenditures has become a viable way to reduce overall expenses. The EcoSmart energy management platform provides HVAC efficiency that can yield energy usage reductions as high as 45%.

When an entire EcoSmart suite is installed, typical properties see significant reductions in utility bills and a rapid 18-36 month ROI.

EcoInsight or EcoAir intelligent thermostats minimize the energy wasted to heat and cool unoccupied rooms

EcoGuard plug-load devices monitor the usage of electricity through in-room outlets

EcoSmart helps increase HVAC efficiency by extending the unit’s working life

http://www.energystar.gov/ia/business/hospitality/Benchmarking_Fact_Sheet.pdf

www.telkonet.com

Room Savings ComparisonThe EcoSmart Value Proposition

Controlling in-room heating and cooling can significantly impact a property’sbottom line. Below are just a few real-world examples of hotels where Telkonet’s energy management technology has decreased energy costs between 22% and 38%.

Hotel Location

www.telkonet.com

EcoSmart TechnologyIntelligent Occupancy-Based Energy Management Control

EcoGuard EcoSwitch EcoContact EcoCommander

EcoView EcoWaveEcoConnectEcoInsight

www.telkonet.com

EcoInsightRevolutionary Energy Management Thermostat

Overview- Onboard occupancy sensor for more accurate room checks

- 100% ZigBee™ compatible for more robust control over your property

- Two configurable soft buttons

Key Features- Highly compatible across many heating and cooling systems

- Easily installed and programmed

- Hardwired to HVAC unit, no batteries required

- Patented Recovery Time Technology

- Networked or stand-alone operations

- Full remote control capability with any web browser via our EcoCentral platform

- Communicates wirelessly with other EcoSmart products to ensure the highest energy savings

www.telkonet.com

EcoWaveWireless Thermostat and Control Package

Overview- Onboard occupancy sensor for more accurate room occupancy checks

- 100% ZigBee™ compatible for more robust control over your property

- Two configurable soft buttons

Key Features- Highly compatible across many heating and cooling systems


- Display thermostat communicates wirelessly with control unit for flexibility

- Patented Recovery Time technology



- Communicates wirelessly with other EcoSmart products to ensure the highest energy savings

www.telkonet.com

EcoViewWired or Wireless In-Room Occupancy Detection Sensor

Overview- Visual appearance to resemble in-room smoke detectors

- Onboard PIR occupancy sensor for more accurate room checks

- 802.15.4 compatible for more robust control over your property

Key Features- Easily installed and programmed

- Optional IP network

- Patented Recovery Time technology

- Interface available for door contacts


- Available in any Pantone color to match your property’s color scheme

www.telkonet.com

EcoContactComprehensive Infra-Red Sensor for Accurate Occupancy Checks

Overview- Compact size is unobtrusive

- 802.15.4 wireless compatible with all EcoSmart products

- Two separate dry contact inputs for multiple door monitoring from one device

Key Features- Robust wireless communications

- Association to multiple thermostats or other EcoSmart devices

- Compatible with Button or Reed style magnetic contacts

- Configurable for Normally Open [N/O] or Normally Closed [N/C] magnetic contacts

www.telkonet.com

EcoGuard and EcoSwitchPlug Load Control and Metering Devices

Overview-Controls power usage with the added benefit of measuring energy consumption

- Supports Simple Metering in ZigBee™ Smart Energy profile

Key Features- Available with a single or dual outlet

- Available in 120V and 240V configurations


- Able to curtail load via EcoCentral


-Communicates wirelessly with other EcoSmart products to ensure the highest energy savings

- Small LEDs communicate network status

www.telkonet.com

EcoConnectReliable Energy Management Communications

Overview- Creates a ZigBee™ Personal Area Network

- IP enabled for easy management

- Easy web configuration

Key Features- Easy installation and maintenance

- 10/100Base-T Ethernet RJ45

- DHCP, Web Interface for IP configuration

- ZigBee™ Certified

- LED lights for easy troubleshooting

www.telkonet.com

EcoCommanderNetwork-Edge EMS Gateway Server

Overview- On-site system server

- Aggregation of signals from all EcoConnects

- Communicates upstream with EcoCentral

- Provides interface to supported property management systems

Key Features- Supports over 4000 802.11q VLANs

- 3 onboard RJ45 ports

- BACnet™ compatible


www.telkonet.com

EcoSmartIn-Room Operation

EcoSmart Installation OptionsWired & Wireless Integration

EcoAir

Standard Installation: Wired

Standard Installation: Wireless

EcoSource

HVAC

HVAC

EcoInsight

www.telkonet.com

EcoSmart Installation OptionsWired & Wireless Integration with Keycard Controller

Keycard Controller

Keycard Controller

EcoAir



EcoSource

HVAC

HVAC

EcoInsight

www.telkonet.com

EcoSmart Installation OptionsWired & Wireless Integration with the EcoContact

EcoContact

EcoContact

EcoAir



EcoSource

HVAC

HVAC

EcoInsight

www.telkonet.com

EcoSmart Installation OptionsNetworked HVAC Control System (Wired + Wireless)

EcoConnect

EcoCommander

EcoCommander

PMSBAS

EcoCentral

PMSBAS

EcoCentral

EcoContact

EcoContact

EcoAir



EcoSource

HVAC

HVAC

EcoInsight

www.telkonet.com

EcoSmart Installation OptionsNetworked HVAC Control System (Lights + Drapes) *Any 110v-130v device

EcoGuard* / Lights EcoGuard* / Drapes

EcoGuard* / Lights EcoGuard* / Drapes

EcoSwitch

EcoSwitch

EcoConnect

EcoCommander

EcoCommander

PMSBAS

EcoCentral

PMSBAS

EcoCentral

EcoContact

EcoContact

EcoAir



EcoSource

HVAC

HVAC

EcoInsight

www.telkonet.com

ZigBee-Enabled SolutionsSimple, Seamless Control

Complete in-room automation for maximized savings

To maximize energy savings, hospitality properties can control all in-room devices. Fortunately, EcoSmart is a ZigBee-enabled solution, which allows us to integrate other ZigBee-enabled technology and transport the data through the energy management network. When integrated with our occupancy sensors, EcoSmart can control the following in-room devices:

- Drapes

- Minibars

- Lighting

-Entertainment Systems

- Door locks

-Safes

www.telkonet.com

EcoSmart Installation OptionsNetworked HVAC Control System (Wireless ZigBee Mesh)

ZigBee Wireless Mesh

EcoSourceInside each guest room

EcoContact

EcoConnect

EcoAir

EcoCommander

PMSBAS

EcoCentral

www.telkonet.com

EcoCentralEcoSmart’s Remote Management Platform

At the core of every EcoSmart solution is EcoCentral, the command center for your energy management network.

EcoCentral provides property and asset managers with the most comprehensive occupancy-based management program available. EcoCentral even allows you to track energy savings room by room--and the aggregate total property savings so you’ll know exactly when your EcoSmart system has paid for itself.

Real-time status updates for all networked equipment

Alerts via text or e-mail

Tracking of energy savings and reporting statistics

Load shedding capability - Demand Response ready

www.telkonet.com

www.telkonet.com

EcoCentralEcoSmart’s Remote Management Platform

EcoCentral reports can illustrate HVAC activity and room occupancy.

The Green ButtonGet the Most Out of Your Thermostat

You can empower your guests to take part in additional energy conservation

Available on all EcoSmart thermostats, the Green Button allows guests to actively participate in a number of environmentally friendly initiatives - from energy conservation to reuse of towels and linens. Though the function of the Green Button varies according to property request, some of the options available for the Green Button are:

Deeper setback points

Longer drift times

Longer recovery times

When integrated with Property Management Systems, guests can receive affinity program bonus points for their environmentally conscious decisions during their stay.

www.telkonet.com

Recovery Time Telkonet’s Patented Technology

Recovery Time ensures that rooms are never uncomfortably warm or cool.

• Evaluates each room independently in real time to determine its energy efficient temperature, or setback• Considers environmental and other characteristics in each room• Constantly calculates how far each room’s temperature can drift from the setpoint and still return within the

Recovery Time• Room temperatures quickly return to occupant’s preferred setpoint upon re-entry

www.telkonet.com

Assumptions:

•Recovery Time defined as 12 minutes by property

•User Setpoint = 72F

•Hysteresis = 2 degrees

•Sunny day, south façade, drapes open

The Benefits of EcoSmartIt’s Easy Being Green

For you...• Significant energy savings• Reduced operating costs• Extended equipment life• Satisfied guests

For your guests...

• Optimized thermal comfort• Complete thermostat control• Consistent guest experience• Improved responsiveness

For the environment...

• Reduced greenhouse gas emissions• Minimized need for new power

plants and associated infrastructure

www.telkonet.com

Demand ResponseEarn Compensation for “Negawatts”

What is demand response?

Demand response is the process of reducing peak demand to balance electricity production and consumption. An imbalance means the energy company must run peak power plants, generate extra emissions, and charge higher prices for electricity.

What is load shedding?

Load shedding is part of demand response. Power plants may not always meet the need of “peak demand,” the greatest amount of electricity required by all utility customers within a given region. To reduce the electric demand on power grids at critical periods, hotels can shed load by drastically reducing energy consumption.

The energy that a property would have consumed but did not becomes “negative energy,” or negawatts, which can be sold back to the power company.

By prioritizing and targeting spaces that are unsold and unoccupied, savings can be maximized without affecting guest comfort.

Power

(MW)

Normal Electric Energy Use

Use with Demand Response

SAVINGS

Peak Energy Demand Occurs at 3pm

Time of Day

Demand Response Reduces your Energy Load at Peak Times, Generating Substantial Savings

www.telkonet.com

EcoCentral and the Smart GridIntelligent Grid Communications

EcoSmart Grid Management

Telkonet’s EcoSmart suite provides a solution for the final steps of intelligent grid communications, allowing you to remotely control all the devices connected to the network

Intelligent Energy ManagementControl Energy Usage

EcoCentralWeb-Based Management

Smart GridLoad Shedding Events

By creating an intelligent and proactive network, Telkonet connects you, the consumer, to the smart grid.

www.telkonet.com

Let Telkonet Help You Take ControlContact Us Anytime for More Information

EcoSmart SalesToll-Free: +1 888.703.9398

[email protected]

EcoSmart SupportToll-Free: +1 800.380.9640

[email protected]

Investor RelationsP: +1 414.721.7988

[email protected]

Telkonet, Inc.10200 West Innovation Dr., Suite #300

Milwaukee, Wisconsin 53226

P: +1 414.223.0473 F: +1 414.258.8307www.telkonet.com

www.telkonet.com

Eco smart overview-august 2012

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