Echelon Expands Standards Coverage in China to Buildings and Residential Communities

Second Chinese Standard in Three Months for the LonWorks Platform

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(San Jose, CA - September 19, 2006) - Echelon Corporation (NASDAQ: ELON), a global networking company providing technology and solutions for controls, smart metering, and energy and environment management, today announced that its control technology has been incorporated in the Chinese national standard for commercial buildings and residential community construction. Initiated by the China Ministry of Construction to promote digital technologies in buildings and residential communities, the latest standard from the Standardization Administration of China (SAC) incorporates Echelon's LonWorks® technology in the following standard: GB/T 20299.4-2006 Digital Technique Application of Building and Residence Community Part 4: Application Requirements of Control Network Communication Protocol. This is the second Chinese national standard to adopt LonWorks technology in the past three months. In June, the SAC adopted LonWorks technology in the national standard for control applications.

"We are pleased that the new GB/T 20299.4-2006 standard incorporates LonWorks technology as the control networking technology of choice for the commercial building and residential construction markets in China," said Lai, Ming, Director General of Department of Science and Technology, China's Ministry of Construction. "This important new standard provides a solid foundation for supporting the national strategy of improved energy efficiency and conservation through the creation of advanced, energy efficient environments."

China has one of the fastest growing economies in the world and the real estate market is growing at a rapid pace. According to the China State Council Development Research Center, demand for residential construction area per person is increasing: In 2004, the average was 25 square meters per person, while in 2010, the average is expected to be increase to 35.66 square meters per person. Nationwide, demand for residential construction area is expected to grow from 13 billion square meters in 2004 to 20 billion square meters in 2010. Forecasts for non-residential real estate sales and construction also show growth, with the sales of non-residential real estate continuing to grow from approximately 44 million square meters in 2005 to over 86 million square meters expected in 2010, for an annual growth rate of 14.43%.

"Echelon's LonWorks platform has been incorporated in standards for many industries worldwide, and this latest GB/T 20299.4-2006 standard in China is particularly significant as the next step in adoption of the LonWorks platform as a worldwide control standard," said Ken Oshman, Echelon's chairman and CEO. "The formalization of the LonWorks platform as the control technology of choice for commercial buildings and residential community construction in China's fast growing economy is very exciting, and will enable a new generation of intelligent, energy efficient construction."

The LonWorks platform is an open platform that allows end-users to choose from a variety of manufacturers for interoperable products. There are hundreds of manufacturers worldwide producing thousands of LonWorks enabled products, including many in China. The rapid pace of construction in China makes the LonWorks platform an ideal solution for commercial buildings and residential communities, providing a large choice of products for future years and freeing builders from costly single-sources of products.

[an error occurred while processing this directive] The North American building, home, industrial and transportation automation industries all currently have standards based upon the LonWorks platform and/or the communications protocol of the LonWorks platform. European buildings, petrol stations, and several governments have all standardized on the LonWorks platform. The platform is the technology that underlies the world's largest smart metering deployment of over 27 million residential electricity meters and is slated for use in smart metering applications for up to an additional 1.1 million residential and light commercial electricity meters in Sweden, The Netherlands and Australia by the end of 2007.

About the Standardization Administration of China (SAC)
The Standardization Administration of the People's Republic of China (SAC) is authorized by the State Council and is under the control of AQSIQ to exercise administrative functions and carry out centralized administration for standardization in China. The provinces, autonomous regions, municipalities, cites and counties are also establishing standardization departments in their governments.

The State General Administration of the People's Republic of China for Quality Supervision and Inspection and Quarantine (AQSIQ) is a law enforcement administrative organization of the State Council in the field of quality, metrology, entry-exit commodities inspection, entry-exit health quarantine, entry-exit animal and plant quarantine, certification, accreditation and standardization.

More information regarding the SAC can be found at http://www.sac.gov.cn.

About the China Ministry of Construction
The China Ministry of Construction is an administrative department under the State Council and is the central Chinese government regulator of construction and real estate sectors. The Ministry of Construction's responsibilities include formulating policies, providing guidelines, regulations and related development strategies for urban planning and construction, village and town planning and construction, and the building and housing industry. It supervises the implementation of its policies in the above fields and creates and implements national standards in related fields.

More information regarding the Ministry of Construction can be found at http://www.cin.gov.cn.

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 LonWorks platform for control networking was released in 1990 and has become a worldwide standard in the building, industrial, transportation, and home automation markets. Launched in 2003, Echelon's Networked Energy Services (NES) system is an open, extensible, advanced metering infrastructure that can bring benefits to every aspect of a utility's operation, from metering and customer services to distribution operations and value-added business. In 2005 Echelon released the world's first embedded control network infrastructure, the Pyxos™ platform. The Pyxos platform extends the benefits of networking inside machines to the sensors and actuators that make them function and expands the reach and power of LonWorks control networks.

Echelon has been a leader in the advanced metering infrastructure market, providing the underlying network technology for the world's largest advanced meter management (AMM) project in Italy, with over 27 million connected electricity meters and more recently, winning tenders to provide the NES system to 700 thousand to 1.1 million customers for utilities in Sweden, The Netherlands and Australia.

Echelon is based in San Jose, California, with 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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