June 2013

Connecting the world of energy

The Digital Energy Company

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Safe Harbor Statement

Certain of the matters discussed in this presentation contains statements that are forward-looking, such as statements relating to results of operations, financial condition, business development activities and market dynamics. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made on or behalf of Acorn Energy.

All statements other than statements of historical fact in this presentation regarding Acorn Energy’s future performance, revenues, margins, market share and any future events or prospects are forward-looking statements.

For more information regarding risks and uncertainties that could affect Acorn Energy’s results of operations or financial condition review Acorn Energy’s filings with the Securities and Exchange Commission (in particular, it’s most recently filed Form 10-K and Form 10-Q).

Acorn Energy’s forward-looking statements are not guarantees of future performance and the actual results or developments may differ materially from the expectations expressed in the forward-looking statements. As for the forward-looking statements that relate to future financial results and other projections, actual results will be different due to the inherent uncertainties of estimates, forecasts and projections and may be better or worse than projected and such differences could be material.

Acorn Energy undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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The Digital Energy Company

Why should you own Acorn Energy?

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Acorn History and Proven Track Record

September 2005 2007 August 2011

• April COMV IPO @ $250MM Valuation

• December Secondary @ $600MM Valuation

• Buy CoaLogix $10 M

• Sell CoaLogix $100 M

$16 million net of dividends raised to create $140 million of value

• $10MM Market Cap

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Acorn Energy Portfolio

• 4 strong businesses

• Great customer traction

• Strong management teams

• Huge revenue growth expected

• ACFN majority owner• We supply growth capital

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Highlights• Seven reference clients• Non-dilutive funding

Market Drivers• Global insecurity

• Secure infrastructure

• New tech needed

Financial Snapshot

• $13.6M Rev 2012• $9.6M in backlog • 37% Gross Margin • 84% Ownership Stake

TAM $3.5 B+

• 3,500 energy facilities on/near water

Sensing technologies to detect and alert security teams to the presence of U-W threats to critical energy infrastructure

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• Over 1500 American Tower sites monitored by Omnimetrix, all operated with 100% uptime• Unmonitored generators fail 10% of the time called on• FCC is holding hearings to improve power assurance for cell towers• 220,000 cell towers in USA

Remote monitoring solutions for back-power as well as pipelines

* Pre- management option pool

During Hurricane Sandy 25% of all Cell Towers were without power

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Highlights• Lowering costs• Increasing features• Recruited sales force

Market Drivers• Cell tower power

assurance • Dependence on

wireless• Aging grid

Financial Snapshot

• $661k Rev 2012

• $533k Rev Q1 2013

• 96% gross margin on renewals

• 100% ownership*

TAM $1B+

• Over 2M permanently-installed back-up generators (50:50 residential/C&I)• < 2% generators monitored• < 2% households have generator• 75% growth in connections and >5,000 monitors

Remote monitoring solutions for back-power as well as pipelines

* Pre- management option pool

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Highlights• Pilots with 46 utilities• Alain Steven on board• Web-based platform

Market Drivers• Demand for reliable

power/ 4 challenges• Aging grid• Power theft• Cyber security• Renewables

Financial Snapshot

• $3.7M Rev in 2012

• $1.5M Rev in Q1 2013

• 43% Gross Margin

• 100% ownership*

TAM $1B+

• 30M U.S. transformers (sensor locations)• Less than 2% transformers have sensors• >400 utility customers worldwide

Cost-effective sensors for transformers and power lines (easy retrofit) to help utilities improve electric grid

* 17% phantom option plan

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The 3D Seismic Imaging Revolution for Conventional Oil Predicts the Benefit of a 4D Seismic Revolution

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Evolution from 2D to 4D Seismic

History and Future of Seismic

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Unconventional Oil Frac Jobs Are Not Meeting Producers Expectations

“

- 50% of frac stages produce zero hydrocarbons

- 20% of frac stages responsible for 80% of production

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Oil Producers Need to Improve Productivity and NPV of Wells

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Solution: Revolutionary 4D Microseismic Monitoring

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Optical Fiber SensorElectronic-based Sensors

Replace This… With This

“..the industry is on the verge of a step change in well and reservoir monitoring capability”-Jorge Lopez et al, Shell Oil

Optical Fibers: The Neurons For Future Intelligent Wells

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Forbes: Big Data And Microseismic Imaging Will Accelerate The Smart Drilling Oil And Gas Revolution*

This (USSI) imaging technology does for seismic the equivalent of going from 20th century x-rays to 21st century MRI.

Microseismic brings radically enhanced navigation and, critically, the opportunity for a new era of dynamically controlled subsurface operations

…getting the stages to be productive can only come from far more precision and far higher resolution of the underground domain… Operators need to move from today’s static and episodic geophysics maps to dynamic models of how rocks and fluids change.

You need to see the micro-fractures from the real-time results of the fracking itself. Hearing the millimeter-scale cracks forming complex arrays in shale a mile away, then separating out the signals from confounding environmental noise is like hearing a whisper from the other side of a noisy auditorium. All of these “micro” events are not detectable with standard seismic.

…today’s best-in-class geophones cannot fully unlock the potential of microseismic. The sensors need to see (hear) signals at 100 times the bandwidth, and be at least 100 times more sensitive (quieter). And, in an ideal world - which eventually becomes the standard operating procedure - imaging has to move from snap-shots to continuous real-time monitoring…This will require a newclass of sensors both cheap and robust enough to survive for long periods, even permanently in the hot underground. Conventional electronics cannot deliver that combination.

Making practical fiber optic geophones has been devilishly difficult. The issue isn’t in the physics ... The challenge has been to come up with a design that is simple, easy to manufacture, yielding a highly reliable and reproducible product.

…the revolution really takes hold as the full power of U.S. Seismic’s richer data streams enable the emergence of better algorithms and…models that accommodate the complex mix of both plastic and brittle behavior of rocks in the subsurface…where correlations become possible now across the entire suite of hydrocarbon information - surface survey maps, drill-bit sensors, flow rates, pressures, temperatures, chemical analyses, etc. There is no chicken-egg uncertainty in which comes first; better and richer data flows will drive the emergence of new big data analytics.

Microseismic capabilities are not only economically exciting, they promise collateral opportunity for greater safety and environmental monitoring

* Mark Mills for Forbes. May 2013

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How Our Technology Works

Laser

Downhole Fiber OpticGeophone Array

-High performance-Lower cost-More reliable

Optical Interrogator

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How Microseismic Monitoring Works

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USSI Gaining Critical Field Experience

● Seven pilot trials two years● First commercial trial, big system December 25, 2012● Soon to announce major customer trial results

USSI Geophone

Electronic Geophone

Well Head

Fayetteville - ARK Devine - TXNew Iberia - LO

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Microseismic Needs a Higher Performance Sensor10x Better at Low Frequency-100x at High Frequency

US DOE Lawrence Berkeley National Laboratory (LBNL) Richmond Field test site

- highest sensitivity (improved signal to noise ratio) - lowest noise floor (detects quieter signals)- widest bandwidth (detects all signals of interest) - highest temperature capable

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Small Increase in Well Productivity Yields Huge ReturnsTwo different services for unconventional oil producers

Economics of 3D Vertical Seismic ProfilingCurrent SituationVertical well cost $1 million30 fracs cost $9 million

The Problem20% of frac spend is effective= $2.8 million

Upfront Investment:$500,000 to survey before fraccingEstimated savings by eliminating 50% unproductive frac stages= $3.1 million

ROIC +600%

Microseismic while frackingTo Improve Yields:$400,000 per well x 8 = $3,200,000

Results:-$33M @ 10% improvement-$65M @ 20% improvement-$100M @30% improvement

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Proven Fiber Optic Technology and TeamImproves Odds of Success

• Revolutionary fiber sensor emerged from DOD -USSI CEO started and led team-Built, installed world’s largest fiber sensor system-Key members of team now at USSI

• USSI commercialized technology

•USSI expanded IP• 7 issued and 17 patents filed

•USSI licensed DOD technology• 4 issued patents

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Acorn Energy Directors and Management Team

- Chris Clouser, Chairman

- John Moore, CEO

- Richard Rimer, Executive Vice President

- Rob McKee, Director

- Mannie Jackson, Director

- Ed Woolard, Advisor

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Income Statement (Q1 2013)

Three months ended March 31, 2013

DSITOmniMet

rixGridSense USSI Acorn Total

 Revenues $ 3,315 $ 533 $ 1,543 $ 325 $ — $ 5,716

 Cost of Sales 2,011 205 882 493 — 3,591

 Gross profit 1,304   328   661   (168 ) —   2,125   Gross profit margin 39 % 62 % 43 % (52 )% 37 %

 R& D expenses, net of credits

271 120 712 898 — 2,001

 Selling, general and administrative expenses

836 1,151 1,096 781 1,392 5,256

 Operating income (loss) $ 197

 $ (943 ) $ (1,147 ) $ (1,847 ) $ (1,392 ) $ (5,132 )

           Three months ended March 31, 2012

DSITOmniMet

rixGridSense USSI Acorn Total

 Revenues $ 3,041 $ 103 $ 918 $ 121 $ — $ 4,183

 Cost of Sales 2,014 63 574 332 — 2,983

 Gross profit 1,027   40   344   (211 ) —   1,200   Gross profit margin 34 % 39 % 37 % (174 )% 29 %

 R& D expenses, net of credits

176 16 218 908 — 1,318

 Selling, general and administrative expenses

723 201 1,248 596 1,461 4,229

 Operating income (loss) $ 128

 $ (177 ) $ (1,122 ) $ (1,715 ) $ (1,461 ) $ (4,347 )

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Income Statement2012 2011

Revenues:

Projects $ 14,651 $ 11,368 Products 3,880 7,049

Services 888 511

Total revenues 19,419 18,928

Cost of sales:

Projects 10,749 7,886

Products 2,996 3,730

Services 471 399

Total cost of sales 14,216 12,015

Gross profit 5,203 6,913

Operating expenses:

Research and development expenses, net 6,590 2,995

Selling, general and administrative expenses 19,361 11,952

Total operating expenses 25,951 14,947

Operating loss (20,748) (8,034)

Finance expense, net 57 (26)

Gain on sale of HangXing - 492

Loss before taxes on income (20,691) (7,568)

Income tax benefit (expense) 2,956 12,767

Net income (loss) from continuing operations (17,735) 5,199

Loss from discontinued operations, net of income taxes - (1,948)

Gain on the sale of discontinued operations, net of income taxes - 31,069

Non-controlling interest share of loss from discontinued operations - 540

Net income (loss) (17,735) 34,860

Net loss attributable to non-controlling interests 1,024 549

Net income (loss) attributable to Acorn Energy, Inc. shareholders $ (16,711) $ 35,409

Basic net income (loss) per share attributable to Acorn Energy, Inc. shareholders:

From continuing operations $ (0.93) $ 0.33

From discontinued operations $ - $ 1.70

Basic net income (loss) per share attributable to Acorn Energy, Inc. shareholders $ (0.93) $ 2.03

Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders – basic 17,891 17,462

Diluted net income (loss) per share attributable to Acorn Energy, Inc. shareholders:

From continuing operations $ (0.93) $ 0.32

From discontinued operations $ - $ 1.67

Diluted net income (loss) per share attributable to Acorn Energy, Inc. shareholders $ (0.93) $ 1.99

Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders – diluted 17,891 17,743

Dividends declared per common share $ 0.140 $ 0.085

Year ended December 31,

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Balance Sheet2012 2011

LIABILITIES AND EQUITYCurrent liabilities:Short-term bank credit and current maturities of long-term debt

$ 153 $ 677

Accounts payable 2,631 2,052 Accrued payroll, payroll taxes and social 2,420 1,907 Deferred revenue 3,323 2,876 Other current liabilities 1,708 4,544

Total current liabilities 10,235 12,056

Non-current liabilities:

Accrued severance 4,491 3,837 Long-term debt - 141 Other long-term liabilities 665 204

Total non-current liabilities 5,156 4,182

Commitments and contingencies

Equity:Acorn Energy, Inc. shareholdersCommon stock - $0.01 par value per share:Authorized – 30,000,000 shares; Issued –18,870,526 and 18,325,529 shares at December 31, 2012 and 2011, respectively

188 183

Additional paid-in capital 83,469 84,614 Warrants 55 427 Accumulated deficit (29,733) (13,022)Treasury stock, at cost – 801,920 shares at December 31, 2012 and 2011

(3,036) (3,036)

Accumulated other comprehensive income 716 485

Total Acorn Energy, Inc. shareholders’ equity 51,659 69,651

Non-controlling interests 286 (84)

Total equity 51,945 69,567

Total liabilities and equity $ 67,336 $ 85,805

As of December 31,

2012 2011

ASSETSCurrent assets:Cash and cash equivalents $ 26,147 $ 34,280 Short-term deposits - 18,000 Restricted deposit 699 2,223 Funds held in escrow - 5,961 Accounts receivable 5,481 4,965 Unbilled revenue 5,213 3,778 Inventory 5,106 2,144 Other current assets 3,547 922

Total current assets 46,193 72,273

Property and equipment, net 927 635

Severance assets 3,165 2,620 Restricted deposit 115 271 Intangible assets, net 9,561 4,780 Goodwill 6,630 4,637 Other assets 745 589

Total assets $ 67,336 $ 85,805

As of December 31,

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Cash Flows2012 2011

Cash flows used in operating activities:

Net income (loss) before non-controlling interests $ (17,735) $ 34,320 Less net loss from discontinued operations - (29,121)

Net income (loss) from continuing operations (17,735) 5,199

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation and amortization 1,406 851 Change in deferred taxes (1,832) (14,657)Inventory write-off 357 - Increase in liability for accrued severance 573 390 Gain on sale of HangXing - (492)Stock and stock option compensation 855 458 Other 15 (87) Changes in operating assets and liabilities:Decrease in accounts receivable, unbilled revenue, other current assets and other assets (3,981) (89)Increase in inventory (3,076) (1,027)Increase in accounts payable, accrued payroll, payroll taxes and social benefits, other current liabilities and other non-current liabilities 1,175 1,615

Net cash used in operating activities – continuing operations (22,243) (7,839)

Cash flows provided by (used in) investing activities:Acquisitions of property and equipment (684) (502)Acquisition of license (150) - Restricted deposits, net 1,680 (1,091)Advances to CoaLogix prior to sale - (278)Amounts funded for severance assets (476) (315)Proceeds from the sale of Coreworx debt and shares - 100 Proceeds from the sale of CoaLogix net of CoaLogix cash - 62,117 Proceeds from the sale of HangXing - 492 Escrow deposits from CoaLogix sale - (6,308)Release of escrow deposits 5,961 347 Short-term deposits, net 18,000 (18,000)Acquisition of OmniMetrix net of cash acquired (7,835) -

Net cash provided by investing activities – continuing operations 16,496 36,562

Cash flows provided by (used in) financing activities:

Proceeds from employee stock option and warrant exercises 1,355 211 Short-term bank credit, net (510) (557)Proceeds from borrowings of long-term debt 16 68 Repayments of long-term debt (173) (342)Dividends paid (3,208) (613)Other - 30

Net cash used in financing activities – continuing operations (2,520) (1,203)

Net cash used in discontinued operations - (524)

Effect of exchange rate changes on cash and cash equivalents 134 (72)

Net increase (decrease) in cash and cash equivalents (8,133) 26,924

Cash and cash equivalents at beginning of the year of discontinued operations - 807 Cash and cash equivalents at beginning of year of continuing operations 34,280 6,549

Cash and cash equivalents at end of year $ 26,147 $ 34,280