New Combined Heat and Power System to be Provided at No Cost.

WALTHAM, Mass.,

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American DG Energy Inc. (NYSE Amex: ADGE), a leading On‑Site Utility, offering clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and athletic facilities, has reached an agreement to supply clean energy to Governor Paterson Towers, a 225 unit, 30 story, residential high-rise, located in Paterson, New Jersey. Under the terms of the agreement, Governor Paterson will soon receive a significant portion of its energy from a 75 kW combined heat and power (also called CHP or cogeneration) system, which will be owned and operated by American DG Energy. Governor Paterson will receive a discount on the energy produced by the CHP system and reduce its greenhouse gas emissions. The value of the agreement to the Company is $1.9 million over the fifteen-year term.

Working with our partner, Peter Westerhoff, to develop this project, American DG Energy will produce clean energy in the form of electricity, space heat and domestic hot water at Governor Paterson Towers and sell it to the residential property at a price lower than the local energy utility rates. Having opted for the Company’s On-Site Utility energy solution, Governor Paterson will pay only for the energy used by the property and will avoid all capital, installation and operating costs. The energy will be produced with small-scale, combined heat and power equipment, located at the property site but owned and operated by American DG Energy. The Company will also handle all service, maintenance and repair; therefore, Governor Paterson will not need to provide manpower to support the equipment.

CHP systems offer considerable environmental benefits when compared with purchased electricity and on-site-generated heat from a boiler. By capturing and utilizing heat that would otherwise be wasted from the production of electricity, CHP systems require less fuel than equivalent separate heat and power systems to produce the same amount of energy. Because less fuel is combusted, greenhouse gas emissions, such as carbon dioxide, as well as air pollutants like nitrogen oxides and sulfur dioxide, are reduced.

The CHP system planned for Governor Paterson Towers will be comprised of a CM-75 Ultra by Tecogen, which is equipped with a proprietary ultra-clean emissions technology and has recently been granted the new air emissions certification from the New Jersey Department of Environmental Protection (NJDEP). This certification eliminates the process of applying for pre-construction operation certification and air permits prior to installation which will save time and money on implementation of this project. In addition, the CHP system is expected to reduce the residential property’s emissions by 252 tons of carbon dioxide annually, the equivalent of removing the carbon emissions of 42 cars each year.*

* Figures were calculated using the EPA CHP Partnership emissions calculator.

On-Site Utility

American DG Energy sells the energy produced from an onsite energy system to an individual property as an alternative to the outright sale of energy equipment. On-Site Utility customers only pay for the energy produced by the system and receive a guaranteed discount rate on the price of the energy. All system capital, installation and operating expenses are paid by American DG Energy. All system installation, operation and support are handled by the Company as well.

About American DG Energy

American DG Energy supplies low-cost energy to its customers through distributed power generating systems. The Company is committed to providing institutional, commercial and small industrial facilities with clean, reliable power, cooling, heat and hot water at lower costs than charged by local utilities – without any capital or start-up costs to the energy user – through its On-Site Utility energy solutions. American DG Energy is headquartered in Waltham, Massachusetts. More information can be found at www.americandg.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements, as disclosed on the Company’s website and in Securities and Exchange Commission filings. This press release does not constitute an offer to buy or sell securities by the Company, its subsidiaries or any associated party and is meant purely for informational purposes. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

SOURCE American DG Energy Inc.