Where Energy MattersJason Tienor, CEO

October 2011

EcoSwitch! EcoGuard! EcoContact!EcoInsight! EcoWave!EcoView! EcoConnect!

Forward Looking Statement

Certain statements in this presentation, including statements regarding future results and performance, are forward-looking statements based on current expectations.  The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, raw material price increases and availability, currency fluctuations, prevailing electricity selling prices, adverse changes in general market and industry conditions and other factors listed in the Company's filings with different securities commissions.

Company Synopsis

• Founded in 1999• Listed on OTC:BB - TKOI• Multiple acquisitions in March 2007• Current staff of approximately 85 employees• Clean Technology industry• Acquisitions created Telkonet’s two main divisions:

Overview

Telkonet is an emerging Clean Technology leader with:■ Patented and innovative technology

■ Hospitality, education, military, municipal and government installations

We develop, manufacture and market the innovative EcoSmart Suite■ Revolutionary energy management platform with patented Recovery Time™ technology■ Current energy solutions installed in 200,000+ locations and growing

Telkonet operates the largest hospitality HSIA network in the US■ EthoStream Hospitality Network with 2350 locations■ 4.2 million monthly users

Our Sales Strategies■ Direct sales■ Channel sales

-30,000$

-22,500$

-15,000$

-7,500$

0$

7,500$

15,000$

22,500$

30,000$

2006 2007 2008 2009 2010 6/30/2011

Financial Overview

*All numbers given in 000s

This data represents 6 months (YTD) only.

New Management

RevenueGross MarginOperating ExpensesOperating Income (Loss)Net Income (Loss)

The Global problem

0

200

400

600

800

1990 2000 2008 2015 2020 2025 2030 2035

Global energy consumption will increase by 53% between 2008 and 2035.

Source: EIA, International Energy Outlook 2010

0

5

9

14

18

23

27

32

36

41

45

2008 2015 2020 2025 2030 2035

World-wide energy-related carbon dioxide emissions rise 43% between 2008 and 2035.

Energy (Btu)

OECDNon-OECDWorld Total

in billion metric tons

According to the American Council for an Energy Efficient Economy, the cost of saving one unit of energy through energy efficiency is one-fifth the cost required to generate that same unit of energy.

The Telkonet Solution

Demonstrate dedication to the environment

Maximize customersatisfaction and retention

Reduction in energy use and total cost

Provide comprehensiveinsight into every room

Our Technology

Recovery Time™Patented Technology

EcoCentralWeb-Based Management

Smart GridLoad Shedding Events

The EcoSmart Suite

EcoInsight

EcoSwitch EcoGuard EcoContactEcoWaveEcoView

EcoConnect EcoCommander

The EcoSmart Cloud Architecture

EcoSmart In-Room Operation

EcoSmart Key Customers

Market Opportunity

22%

18%

28%

32%

Residential BuildingsCommercial BuildingsTransportationIndustry

ComputersCooking

ElectronicsWet Clean

RefrigerationCooling

LightsWater Heat

HeatingOther

0% 6% 12% 18% 23% 29% 35%

Computers

Cooking

Office Equipment

Refrigeration

Cooling

Lights

Water Heat

Heating

Other

0% 6% 12% 18% 23% 29% 35%

Research shows that the US economy has the potential to reduce annual, non-transportation energy consumption by roughly 23% by 2020. This would eliminate more than $1.2 trillion in waste.

Commercial Energy Patterns Energy management systems for commercial buildings will garner $67 billion in investment by 2020.

Enclosed/Strip Malls

Education

Lodging

Health Care

Office

Other

Warehouse

Public Order and Safety

All Retail

Public Assembly

Religous Worship

Retail and Service

Vacant

Retail(Other Than Malls)

Service

Food Service

Food Sales

0 4 7 11 14 18 21 25 28 32 35

Square Feet (In thousands) Source: EIA, 1995 Commercial Building Energy Consumption Survey

Average use for all commercial buildings:

12.8 thousand sq. ft.

Residential Energy PatternsThe ratepayer-funded energy efficiency program management industry is rapidly expanding in the United States. From 2004 through 2009 ratepayer-funded energy efficiency spending increased from $1.7 billion to $4.4 billion.

45%

11%

6%

2%

10%

2%

2%

7%

15%

Heating/Cooling

Water Heater

Refrigerator

Dishwasher

Clothes Washer/Dryer

Computer/Monitor

TV/VCR/DVD

Lighting

Other 2008 2009 2010 2011 2012 2013 2014

UtilityService ProviderHome AutomationStandalone

EcoSmart’s Competitive Landscape

In-roomEnergy Management

BuildingsCloud Services

Smart GridIntegration and Deployment

EcoSmart’s Competitive Advantages

EcoCentral

Cloud-enabled controland reporting

Integration with 3rdparty systems (open standards)

Compatibility

Recovery TimeTechnology

The EthoStream Network

Solutions:

Largest HSIA Network in the US220,000 rooms, 2350 hotels, 4.2 million monthly users

EGS Pro gateway serversSimple, proactive network management tools

Ubiquitous property coverageProperty-wide, uninterrupted HSIA service

2-5 day seamless installation processMinimal new wiring with no structural intrusion

24/7, 365 in-house support centerUS based, knowledgable, certified support staff

Superior bandwidth management toolsReview bandwidth use to proactively accommodate guests’ needs

Future-proof connectivityProactive updates ensure the highest level of equipment compatibility

Concerns:

Guest expectations

Ease-of-use

Inconsistent wireless

Disruptive installation

Inadequate support resources

Lack of network control

Out-dated equipment

The EthoStream Key Customers

The EthoStream Network

0 sec

2 sec

4 sec

6 sec

8 sec

1999 2006 2009 2012

Users’ expected page response time

0 gb/sec

50,000 gb/sec

100,000 gb/sec

150,000 gb/sec

200,000 gb/sec

250,000 gb/sec

300,000 gb/sec

350,000 gb/sec

400,000 gb/sec

2000 2001 2002 2003 2004 2005 2006 2007 2008

U.S. Consumer Bandwidth Growing Trend

Wireless Residential Source: FCC, industry reports. Energy Economics

• Higher demands in user’s wireless expectations• Growth of wireless and mobile bandwidth consumption• Changes in wireless standards to meet the rise in bandwidth use• New technology requires constant access • The need to ease 3G and 4G mobile data congestion

The Telkonet Pipeline

Projects (current/complete)

Trane → Ft. Drum Military Base

Noresco → West Point Military Academy

NYU Dormitory Facilities

Boyd Gaming Casino

Crown Plaza Times Square

UC Davis Dormitory Facilities

Recurring → ~$4M

-$30,000

-$22,500

-$15,000

-$7,500

$0

$7,500

2006 2007 2008 2009 2010 6/30/2011

Net Income

$0

$1,750

$3,500

$5,250

$7,000

2006 2007 2008 2009 2010 6/30/2011

Gross Margin

$0

$5,000

$10,000

$15,000

$20,000

2006 2007 2008 2009 2010 6/30/2011

Revenue

Financial Summary

$0

$7,500

$15,000

$22,500

$30,000

2006 2007 2008 2009 2010 6/30/2011

Operating Expenses

-$30,000

-$22,500

-$15,000

-$7,500

$0

$7,500

2006 2007 2008 2009 2010 6/30/2011

Operating Income

Financial Comparison

$0

$2,750

$5,500

$8,250

$11,000

6/30/06 6/30/07 6/30/08 6/30/09 6/30/10 6/30/2011

6 months Ended - Operating Expenses

-$15,000

-$11,250

-$7,500

-$3,750

$0

$3,750

6/30/06 6/30/07 6/30/08 6/30/09 6/30/10 6/30/11

6 months Ended - Operating Income

$0

$2,750

$5,500

$8,250

$11,000

6/30/06 6/30/07 6/30/08 6/30/09 6/30/10 6/30/11

6 months Ended - Revenue

$0

$1,000

$2,000

$3,000

$4,000

6/30/06 6/30/07 6/30/08 6/30/09 6/30/10 6/30/11

6 months Ended - Gross Margin

-$15,000

-$11,250

-$7,500

-$3,750

$0

$3,750

$7,500

6/30/06 6/30/07 6/30/08 6/30/09 6/30/10 6/30/12

6 months Ended - Net Income

Balance Sheet

$0

$10,000

$20,000

$30,000

$40,000

12/31/07 12/31/08 12/31/09 12/31/10 6/30/11

Balance Sheet

Total AssetsTotal LiabilitiesTotal Equity

*All numbers given in 000s

Anticipated Milestones

New product introductions

Create larger residential demographic

Further Utility integration

Exceed financial goals

Channel sales

Full-service markets

Expanded HSIA services

Further platform integration

Increased international focus

Market expansion

Our Leadership

Telkonet Management Team:

Jason L. TienorChief Executive Officer

Richard E. “Gene” MushrushChief Financial Officer

Jeffery J. SobieskiChief Operating Officer

Gerrit ReindersExecutive VP of Sales and Marketing

Matthew KochVP of Operations

Telkonet Board of Directors:

Anthony PaoniChairman

William DavisDirector

Jason L TienorDirector

Organization & Facility

Completed transfer of headquarters to Milwaukee, Wisconsin in 2009

Germantown, Maryland facilities under sublease (71%)

Sales

Support

System AdminsAdministration / Finance

Engineering

Executives

Installers

Production / Warehouse

8%

10%

2%

8%

10%

20%

39%

2%

TKOI Market Share Data

Telkonet, Inc.

■ Ticker Symbol: TKOI.OB

■ Price: 9/30/2011: $0.145

■ 52-week High: $0.23

■ 52-week Low: $0.09

Outstanding Shares (as of 6/30/11)

■ Market Capitalization: $21,427,806

■ Fully Diluted Shares: $103,002,390

■ Management Holding: approx. 4%

■ Average Daily Volume: 120,028

Option and Warrants (as of 6/30/11)

■ Price: $0.73

■ Options: 2,458,800

■ Warrants: 15,277,785

■ Average Daily Volume: 17,736,585