Exhibit 99.1

Echelon Reports 2011 First Quarter Results

(SAN JOSE, CA – May 5, 2011) - Echelon Corporation (NASDAQ: ELON) today announced financial results for the first quarter ended March 31, 2011.

“Momentum in our Utility markets drove our solid first quarter revenue results,” said Ron Sege, president and CEO of Echelon. “Recent global events as well as conditions in specific geographies have highlighted the need for a smart grid that is reliable, survivable and instantaneous – distinctive capabilities that differentiate Echelon’s energy control networking solutions. As a result, we are seeing strong demand in areas such as Europe and Russia where Echelon has excelled, as well as emerging markets including Latin America and China where we are now increasing our sales focus. Our improved execution is starting to pay dividends and in fact, based on the strength we are seeing so far this year, we now expect our 2011 revenues to grow towards the higher end of our previously guided range of 20% to 30%.”

Total revenues for the first quarter were $28.4 million, up from $18.1 million in the same period last year, a 56% growth rate. Revenues from Echelon’s Commercial products were $12.6 million in the first quarter, up from $12.3 million in the same period last year. Revenues from Echelon’s Utility products were $14.6 million for the first quarter, up from $5.5 million in the same period last year. Enel revenues were $1.2 million, compared to $362,000 in the same period last year.

Gross margin in the first quarter of 2011 was 46.3% compared with 46.2% in the first quarter of 2010. Total operating expenses for the quarter were $21.7 million compared to $19.0 million in the first quarter of 2010.

GAAP net loss for the first quarter was $9.3 million, or $0.22 cents per share, compared to a net loss of $10.6 million, or $0.26 cents per share, in the same period last year. Non-GAAP net loss for the first quarter was $6.1 million, or $0.15 cents per share, compared to $7.3 million, or $0.18 cents per share for the first quarter of 2010.

Business Outlook

Echelon offers the following guidance for the second quarter of 2011:

For those interested in further discussion regarding this release, Echelon’s management will participate in a conference call today at 2:00 p.m. Pacific/5:00 p.m. Eastern Time. To access the call, dial 866-700-6293 and enter passcode: 49931988 (callers outside the US please use 617-213-8835). An archived replay of the webcast will be available approximately two hours following the end of the call.

Use of Non-GAAP Financial Information

Echelon continues to provide all information required in accordance with GAAP, but believes that an investor’s evaluation of our ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, we provide non-GAAP net income and non-GAAP net income per share data as additional information relating to Echelon’s operating results. Echelon presents these non-GAAP financial measures to provide investors with an additional tool for evaluating Echelon’s operating results in a manner that focuses on what Echelon believes to be its ongoing business operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or net income per share prepared in accordance with GAAP.

Echelon’s management uses certain non-GAAP financial information, namely operating results excluding restructuring charges as well as the impact of stock-based compensation charges made in accordance with FASC 718 (formerly SFAS 123R), to evaluate its ongoing operations and for internal planning and forecasting purposes. Accordingly, we believe it is useful for Echelon’s investors to review, as applicable, information that both includes and excludes these charges (and the related tax impact) in order to assess the performance of Echelon’s business and for planning and forecasting in future periods. Whenever Echelon reports such non-GAAP financial measures, a complete reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure is provided. 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.

About Echelon Corporation

Echelon Corporation (NASDAQ: ELON) is the world’s leading open-standard energy control networking company. Echelon technologies connect more than 35 million homes, 300,000 buildings and 100 million devices to the smart grid, and help customers save 20% or more on their energy usage. With more than 20 years of experience in energy control, Echelon delivers a wide range of innovative solutions to commercial and electric utility customers. More information about Echelon can be found at http://www.echelon.com.

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Echelon, LonWorks and the Echelon logo are registered trademarks of Echelon Corporation registered in the United States and other countries. Other product or service names mentioned herein are the trademarks of their respective owners.

Risk Factors Regarding Forward-Looking Statements

This press release may contain statements relating to future plans, events or performance, including statements regarding Echelon’s anticipated performance, including revenue growth rates, for the second quarter and full year of 2011 and thereafter, in particular markets and in general, and potential future growth. Such statements may involve risks and uncertainties, including risks associated with uncertainties pertaining to the continued development and growth of markets for Echelon’s products and services, and in particular the risk that the Company may fail to receive projected orders for our Utility products; the risk that global economic conditions will affect our customers’ ability to receive approval for or finance Utility or Commercial-based deployments; risks relating to the ability of Echelon’s products and services to perform as designed and meet customer expectations; the risk that Echelon does not meet expected or required shipment, delivery or acceptance schedules for its products and that Echelon may incur penalties or additional expenses or delay revenue recognition as a result; and other risks identified in Echelon’s SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Echelon undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

The financial statements that follow should be read in conjunction with the notes set forth in Echelon’s Quarterly Report on Form 10-Q when filed with the Securities and Exchange Commission.

ECHELON CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

ECHELON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

ECHELON CORPORATION

RECONCILIATION OF NON-GAAP TO GAAP RESULTS

Excluding adjustments itemized below

(In thousands, except per share amounts)

(Unaudited)

An itemized reconciliation between net earnings on a GAAP basis and non-GAAP basis is as follows:

ECHELON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)