Company Generates $1.2 Million in Cash from Operations in Q2, Enters Second Half of Fiscal Year with $9.2 Million Cash Balance, No Debt

Worcester, MA – August 4, 2011 – World Energy Solutions, Inc. (NASDAQ: XWES), a leading energy management services firm, today announced financial results for the three and six months ended June 30, 2011.

Financial Highlights (All figures are in US dollars and compare the three months ended June 30, 2011 results to the same period in 2010.)

Revenue and Backlog

• Quarterly revenue increased 16% to $4.6 million
• Annualized backlog reached a record $14.0 million
• Total backlog was $24.5 million

Operating Results

• Net income was $0.2 million, or $0.02 per share
• Adjusted EBITDA* grew from $0.1 million to $0.7 million
• Gross margins were 80%, up from 77%

Liquidity and Balance Sheet

• Cash from operations increased from $0.3 million to $1.2 million
• The Company raised $5.3 million through a registered equity offering
• Cash and cash equivalents were $9.2 million, with no debt

Product Line Highlights

• Solid revenue and significant customer wins across product lines
• Wholesale customers increased 20% to 73; channel partners grew 40% to 161
• Positive industry and customer response to the Company’s new Seven Levers of Energy Management™ strategic framework and expanded product offering

“I am pleased to report that World Energy continues to produce strong results, recording our best Q2 ever, our fourth consecutive quarter of net income and seventh straight of positive adjusted EBITDA,” said Richard Domaleski, CEO of World Energy Solutions. “Over the trailing 12 months, we have generated $2.9 million of operating cash flow on revenue of $19.1 million. Our base business continues to perform well, and we are capitalizing on new opportunities with a distinct value proposition that resonates with customers as we help them drive down their total energy costs.

“Today, with over $9.0 million in cash on our balance sheet and a business that is reliably generating cash, World Energy is in an excellent position to pursue its strategic initiatives and extend its leadership in energy management.”

Financial Review

Year-to-Date 2011

For the six months ended June 30, 2011, revenue increased by 13% to $9.6 million. This growth reflects increased auction activity in our Retail product line reflecting new customer wins, including continued success in the Pennsylvania electricity market and further growth in our channel partner network.

Gross margin percentage for 2011 was 80% compared to 78% in the same period last year as we continued to benefit from the operating leverage in our business model. Total operating expenses for 2011 were relatively flat as higher third-party and internal commission expense directly associated with the 13% increase in revenue was substantially offset by a net reduction in marketing, investor relations and compliance costs. Net income for 2011 was $0.4 million, or $0.04 per share, compared with a net loss of $0.6 million, or $(0.07) per share, in 2010. This improvement was driven by the increase in revenue and the 2% rise in gross margin percentage.

Q2 2011

Revenue for the three months ended June 30, 2011 rose 16% over the same period last year to $4.6 million due to increased auction activity in our Retail and Wholesale product lines.

Gross margin percentage increased 3% to 80% for the three months ended June 30, 2011, compared to 77% in the same period last year. Total operating expenses for the three months ended June 30, 2011 decreased 2% as decreases in investor relations, compliance and marketing costs exceeded increases in internal and third-party commission expenses resulting from the 16% increase in revenue. Net income for the quarter was $0.2 million, or $0.02 per share, compared with a net loss of $0.5 million, or $(0.06) per share, in Q2 2010.

At June 30, 2011, we had no bank debt and cash and cash equivalents of $9.2 million, compared with $1.7 million at June 30, 2010 and $3.6 million at December 31, 2010. The increase in cash and cash equivalents was primarily due to $5.3 million of net proceeds from our equity offering during the second quarter and cash generated from adjusted EBITDA* of $1.4 million during the first six months of 2011.

Note: Backlog relates to contracts in force on a given date representing transactions between bidders and listers on our platform related to commodity brokerage assuming listers consume energy at their historical usage levels or deliver credits at expected levels. Total backlog represents the revenue that the Company would derive over the remaining life of those contracts. Annualized backlog represents the revenue that the Company would derive from those contracts within the 12 months following the date on which the backlog is calculated. Total and annualized backlog at June 30, 2011 included commodity backlog of $23.5 million and $13.0 million, respectively. In addition, total and annualized backlog include contracted management fees between World Energy and energy consumers for energy management and auction administration services of $1.0 million that are expected to be received over the following 12-month period. These management fees can be terminated within 30 days per the terms of the contracts.

Conference Call & Webcast

World Energy will hold a conference call today, August 4, 2011, at 10:00 a.m. (ET) to discuss its financial results and other corporate developments. To access the conference call by telephone, dial 1-877-407-9210 (domestic) or 1-201-689-8049 (international). A replay will be available two hours after the completion of the call, and for one month following the call, by dialing 1-877-660-6853 for domestic participants or 1-201-612-7415 for international participants, and entering account #286 and conference ID #375744 when prompted. Participants may also access a live webcast of the conference call through the investor relations section of World Energy’s website, www.worldenergy.com. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. An archived replay of the webcast will be available for 365 days.

* Non-GAAP Financial Measures

World Energy continues to provide all information required in accordance with GAAP and also provides certain non-GAAP financial measures. A “non-GAAP financial measure” refers to a numerical measure of the Company’s historical performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable financial measure calculated and presented in accordance with GAAP in the Company’s financial statements. World Energy provides adjusted EBITDA as additional information relating to our operating results. This non-GAAP measure excludes expenses related to share-based compensation, depreciation related to our fixed assets, amortization expenses associated with acquisition-related assets and capitalized software, net interest and income tax expense.

Management believes it is useful to exclude depreciation, amortization, net interest and income tax expense as these are essentially fixed amounts that cannot be influenced by management in the short term. In addition, management believes it is useful to exclude share-based compensation as this is not a cash expense.

Management uses this non-GAAP measure for internal reporting and bank reporting purposes. World Energy provides this non-GAAP financial measure in addition to GAAP financial results, because management believes that this non-GAAP financial measure provides useful information to certain investors and financial analysts in helping them to better understand the Company’s operating results and underlying operational trends. It also provides a consistent basis for comparison across accounting periods.

This non-GAAP financial measure is not prepared in accordance with GAAP. This measure may differ from the GAAP information, even where similarly titled, used by other companies and therefore should not be used to compare the Company’s performance to that of other companies. There are significant limitations associated with the use of non-GAAP financial measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income (loss) prepared in accordance with GAAP.

Whenever World Energy reports non-GAAP financial measures, a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure will be made available. Investors are encouraged to review these reconciliations to ensure they have a thorough understanding of the reported non-GAAP financial measures and their most directly comparable GAAP financial measures. Reconciliation of GAAP net income (loss) to adjusted EBITDA is shown below:

About World Energy Solutions, Inc.

World Energy Solutions, Inc. (NASDAQ: XWES) is an energy management services firm that brings together the passion, processes and technologies to take the complexity out of energy management and turn it into bottom-line impact for the businesses, institutions and governments we serve. To date, the Company has transacted more than $20 billion in energy, demand response and environmental commodities on behalf of its customers, creating more than $1 billion in value for them. World Energy is also a leader in the global carbon market, where its World Energy Exchange® supports the ground-breaking Regional Greenhouse Gas Initiative’s (RGGI) cap and trade program for CO₂ emissions. For more information, please visit www.worldenergy.com.

This press release contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to the following: our revenue and backlog are dependent on actual future energy purchases pursuant to completed procurements; the demand for our services is affected by changes in regulated prices or cyclicality or volatility in competitive market prices for energy; and there are factors outside our control that affect transaction volume in the electricity market. Additional risk factors are identified in our Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission.

For additional information, contact:

WORLD ENERGY SOLUTIONS, INC.

SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET

Source: World Energy Solutions, Inc.