Ticker: ACFN

Investor PresentationDecember 2011

Technology driven solutions for energy infrastructure asset management

Confidential 2

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.

Confidential 3

Confidential 4

Portfolio Companies

• Underwater Infrastructure Security Systems• $4.0MM in Revenue thru Q2 2011• $11.5MM in Revenue for 2010• Profitable in 2010• 84% Ownership Stake

• Smart Grid Distribution Optimization• $2.1MM in Revenue thru Q2 2011• $3.3MM in Revenue for 2010• 100% Ownership Stake

• 4D Seismic Monitoring Systems for Oil & Gas• $248k in Revenue thru Q2 2011• $450k in Revenue for 2010• $2.4MM in backlog of seismic systems• 87% Ownership Stake

Confidential 5

Six Themes Create Shareholder Value

● High CAGR

● High Gross Margins

● Limited Competition

● Experienced Management Teams

● Dominant Positions in Billion Dollar Total Addressable Markets (TAM)

● Capital Light Structure

Confidential 6

Proven Model

March 2006 April 2007 December 2007

•John Moore Appointed CEO

•$10MM Market Cap

•COMV IPO

•$250MM Valuation

•8x Trailing Revenue of $33MM

• COMV Secondary• 16x Trailing

Revenue Valuation• ACFN Sells $50MM

in COMV Shares• 19 Analysts Cover

COMV

Confidential 7

Proven Model

November 2007 December 2010 July 2011

•Acorn makes initial investment

•FY 2007 Revenue of $4.5MM

•$9.6MM Valuation

•FY 2010 Revenue of $21.5MM

•68.9% CAGR from ‘07 to ‘10

•75% US Market Share

• ECP purchases CoaLogix

• $101MM Valuation

• 3.4x CoC Multiple

• 42.8% IRR

Confidential 8

Highlights Financial Snapshot• 4D Seismic Monitoring

Systems for Oil & Gas• ‘10 Frost & Sullivan Award• October 2010 Octave

Technology Partnership• $2.4MM in sales backlog

• $248k Rev thru Q2 ‘11

• $1B US TAM

• Exciting Growth Prospects

• 87% Ownership Stake

• Profitable in 2012

Near Term Growth Catalysts

• Shale Gas Trial

• High Temp Seismic Order by DOE

• Large Scale Marine Seismic Order

• First Microseismic Order

Confidential 9

Highlights Financial Snapshot• Underwater Infrastructure

Security Systems• Israeli Navy Technology• 70% Global Market Share• Over 3,500 Water Based

Energy Terminals• 3 Reference Clients

• $4.0MM Rev thru Q2 ’11• 30% CAGR from ‘07 – ’10• 40% Gross Margins• $3.5B TAM• 84% Ownership Stake• One Primary Competitor• Profitable in 2010

Near Term Growth Catalysts

• Signed $1.75mm Contract in August

• Strong Channel • Strong Pipeline

Confidential 10

Highlights Financial Snapshot• Smart Grid Distribution

Optimization• Over 950k Transformers in

the US, < 2% Monitored• Southeastern utility adopts

TransformerIQ to monitor over 2,000 transformers

• Pole-top transformer launch

• $2.1MM Rev thru Q2 ’11

• 45% + Gross Margins

• $1B US TAM

• 100% Ownership Stake

• Fragmented Competition

Near Term Growth Catalysts

• Robust Pipeline

• Strong Channel• LineIQ Launch

• Pole-top Transformer Launch

Confidential 11

Sensitivity Analysis

0.1

1.0

10.0

100.0

1,000.0

10,000.0

1 10 100 1,000

Scal

e fa

ctor

(Vol

ts/g

)

Frequency (Hz)

USSI fiber optic accelerometer frequency response is more than 300x standard seismic geophone

Fiber optic accelerometer

Geospace OMNI-2400 geophone

• 4D Sensing Technology is the Next Revolution in the Seismic Evolution

• USSI Fiber Optic Accelerometer Frequency Response is More Than 300x the Standard Geophone

Confidential 12

Competitive Landscape

Confidential 13

Balance SheetASSETS As of September 30, As of December 31,

2011 2010Current assets:

Cash and cash equivalents 55,182 6,549

Restricted deposit 877 1,317

Funds held in escrow 6,308 -

Accounts receivable 3,561 5,273

Unbilled revenue 4,432 3,806

Inventory 1,860 1,114

Other current assets 513 333

Discontinued operations - 9,424

Total current assets 72,733 27,816

Property and equipment, net 594 490

Severance assets 2,604 2,498

Restricted deposit 81 85

Intangible assets, net 4,880 5,339

Goodwill 4,572 4,679

Deferred taxes 289 302

Other assets 528 378

Discontinued Operations - 18,198

Total assets $86,281 $59,785

LIABILITIES AND EQUITY As of September 30, As of December 31,

2011 2010Current liabilities: Short-term bank credit and current maturities of long-term bank debt

914 1,308

Accounts payable 2,338 2,578

Accrued payroll, payroll taxes and social benefits 1,544 1,531

Other current liabilities 5,316 3,428

Current liabilities of discontinued operations - 4,372

Total current liabilities 10,112 13,217

Long-term liabilities:

Accrued severance 3,842 3,715

Long-term debt 225 302

Other long-term liabilities 191 240

Discontinued operations - 434

Total long-term liabilities 4,258 4,691

Equity:Common stock - $0.01 par value per share:

183 180Authorized – 30,000,000 shares; Issued –18,067,925 and 18,318,863 shares at December 31, 2010 and September 30, 2011

Additional paid-in capital 85,957 83,596

Warrants 427 427

Accumulated deficit -11,931 -48,431

Treasury stock, at cost – 801,920 shares at December 31, 2010 and September 30, 2011 -3,036 -3,036

Accumulated other comprehensive income 324 637

Total Acorn Energy shareholders’ equity 71,924 33,373

Non-controlling interests -13 8,504

Total equity 71,911 41,877

Total liabilities and equity $86,281 $59,785

Confidential 14

Income StatementNine Months Ended September 30,

2011 2010Revenues: Projects 7,250 8,447 Smart grid distribution products and services 4,684 1,188 Other 319 360 Total revenues 12,253 9,995 Cost of sales: Projects 5,220 4,632 Smart grid distribution products and services 2,451 512 Other 255 249 Total cost of sales 7,926 5,393 Gross profit 4,327 4,602 Operating expenses: Research and development expenses, net of credits 1,587 502 Selling, general and administrative expenses 8,609 7,668 Total operating expenses 10,196 8,170 Operating loss -5,869 -3,568Finance expense, net 46 -140Gain on investment in GridSense - 1,327Distribution from EnerTech - 135Gain on sale of HangXing 492 -Loss before taxes on income -5,331 -2,246 Income tax benefit (expense) 12,072 -570Net income (loss) from continuing operations 6,741 -2,816Loss from discontinued operations -1,948 -8,714Gain on the sale of discontinued operations, net of income taxes 30,683 -Non-controlling interest share of loss from discontinued operations 540 284Net income (loss) attributable to Acorn Energy 36,016 -11,246 Net loss attributable to non-controlling interests 484 404

Net loss attributable to Acorn Energy Inc. 36,500 -10,842

Diluted loss per share attributable to Acorn Energy, Inc. shareholders: From continuing operations 0.41 -0.17 From discontinued operations 1.65 -0.58

Net income (loss) per share attributable to Acorn Energy, Inc. shareholders 2.06 -0.75

Weighted average number of shares outstanding attributable to Acorn Energy Inc. – basic and diluted 17,740 14,475

Confidential 15

Statement of Cash FlowsNine Months Ended September 30th,2011 2010

Cash flows used in operating activities:Net income (loss) before non-controlling interests 35,476 -11,530Less net loss from discontinued operations -28,735 8,714 Net income (loss) from continuing operations 6,741 -2,816

Adjustments to reconcile net loss to net cash used in operating activities (see Schedule A) -13,355 -2,105 Net cash used in operating activities – continuing operations -6,614 -4,921

Cash flows provided by (used in) investing activities:Investment in Enertech - -900Restricted Deposits -656 -1,225 Release of restricted deposits 1,096 672 Loan to GridSense prior to acquisition - -200Advances from CoaLogix prior to sale -278 -Proceeds from the sale of CoaLogix net of CoaLogix cash 61,632 -Escrow deposits from CoaLogix sale -6,308 -Proceeds from the sale of HangXing 492 -Amounts funded for severance assets -225 -190Acquisitions of property and equipment -351 -172

Acquisition of USSI, net of cash acquired - 7Acquisition of GridSense, net of cash acquired - (1,352)Acquisition of OMI - -

Net cash provided by (used in) investing activities- continuing operations 55,402 -3,360Cash flows provided by (used in) financing activities:Proceeds from capital raises, net of transaction costs - 11,467 Issuance of shares to non-controlling interests in consolidated subsidiary - 3,010Exercise of options and warrants 194 220 Short-term debt borrowings (repayments), net -348 797 Proceeds from borrowings of long-term debt 68 - Repayments of long-term debt -238 -159Other 29 50

Net cash provided by financing activities – continuing operations -295 15,385 Discontinued operations: Operating cash flows -2,020 -6,996 Investing cash flows -187 -6,790 Finance Cash Flows 1,683 364 Net cash used in discontinued operations -524 -13,422Effect of exchange rate changes on cash and cash equivalents -143 158 Effect of exchange rate changes on cash and cash equivalents of discontinued operations - -82

Net increase (decrease) in cash and cash equivalents 47,826 -6,242

Cash and cash equivalents at beginning of period 6,549 8,339 Cash and cash equivalents at held by continuing operations at end of year 55,182 2,574