Telkonet Expands International VAR Network Generating in Excess of $600,000 in Initial Orders

Business Wire, July 21, 2005

GERMANTOWN, Md. -- Telkonet, Inc. (AMEX:TKO), the leader in providing in-building broadband access over existing electrical wiring, has signed value-added reseller (VAR) agreements with four additional international resellers. Telkonet's resellers to date have generated initial orders in excess of $600,000.

Ron Pickett, CEO of Telkonet, said "Product certification training for our resellers continues as does our recruitment of quality strategic reseller partners. With the recent addition of these 4, we now have 9 VARs in 8 of the 25 member states of the EU. Our certified resellers are gaining sales traction in their respective markets as we anticipated they would. Telkonet's International market share potentially rivals the opportunity in the American market because traditional Internet connectivity using hard-wired (CAT-5) or wireless LAN technology is not always economically or technically feasible for the older building infrastructure. The Telkonet iWire System(TM) is ideal for deploying a secure, high-speed network in such challenging environments."

About Telkonet

Telkonet develops and markets technology for the transmission of high-speed voice, video and data communications over the existing electrical wiring within a building. The revolutionary Telkonet iWire System utilizes proven powerline communications (PLC) technology, which enables the delivery of commercial high-speed broadband access from an IP "platform" that is easy to deploy, reliable and cost-effective by leveraging a buildings existing electrical infrastructure. The buildings existing electrical wiring becomes the backbone of the local area network, which converts virtually every electrical outlet into a high-speed data port, without the costly installation of additional wiring or major disruption of business activity.

The Telkonet iWire System can be installed rapidly and offers a viable and cost-effective alternative to the challenges of hardwiring and wireless local area networks (LANs). Telkonet's products are designed for use in commercial and residential applications, including multi-dwelling units and the hospitality and government markets. Applications supported by the Telkonet "platform" include but are not limited to: VoIP telephones, Internet connectivity, local area networking, video conferencing, closed circuit security surveillance and a host of other information services. For more information, please visit www.telkonet.com.

Statements included in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as competitive factors, technological development, market demand and the Company's ability to obtain new contracts and accurately estimate net revenues due to variability in size, scope and duration of projects, and internal issues in the sponsoring client. Further information on potential factors that could affect the Company's financial results, can be found in the Company's Registration Statement and in its Reports on Forms 8-K filed with the Securities and Exchange Commission (SEC).