For Wallingford Electric, Proton intends to provide a 15 kW UNIGEN(R) RFC Backup Power unit for use in their control room battery system. The unit is designed to operate 24 hours a day and to provide more than eight hours of backup power at the rated load in the event of a power outage.

Wallingford Electric, where the RFC system will be sited, is located adjacent to Proton's headquarters. Ray Smith, director at Wallingford Electric, noting the close proximity of Proton, is eager to begin work on this new and exciting endeavor. "We are extremely pleased to work with Proton on this innovative project. Partnering with Proton to demonstrate a practical use of their technology will serve both of us very well. It is a real added benefit that the field installation is adjacent to both of our facilities. We are looking forward to getting started."

The second CCEF demonstration task is to upgrade an existing RFC system located at the Mohegan Sun Casino's Energy, Environment, Economics, and Education Center. Proton plans to transition the system to a permanent installation of a 4 kW UNIGEN RFC Uninterruptible Power Supply System, enhancing the existing short-term demonstration project, which ended last month, with two new high pressure, high output hydrogen generators. Proton will also improve the current UNIGEN hydrogen storage system to allow for vehicle fueling, creating a combined backup power and vehicle refueler system.

Together the two projects total approximately $900,000. The projects, which will both begin in January 2005, have a one-year trial period after delivery. Robert Friedland, senior vice president of Proton's Hydrogen Technology Group, commented, "CCEF continues to be an important partner in our endeavors to bring our UNIGEN technology architecture into various backup power market segments. These different sites each have unique requirements that allow for significant learning in real world applications."

Proton's UNIGEN regenerative fuel cell technology produces high-pressure hydrogen from water and stores the gas until needed at a later time for backup power generation. The gas then reacts with oxygen from the air in the fuel cell to generate electrical power and pure water.

About the Connecticut Clean Energy Fund -

The Connecticut Clean Energy Fund invests in technology to support the creation of a clean energy supply from renewable sources and fuel cells in order to strengthen Connecticut's economy, protect community health, improve the environment, and promote national energy independence. The Fund, financed by a surcharge on ratepayer's electric utility bills, is administered by Connecticut Innovations. For more information visit http://www.ctcleanenergy.com

About Proton Energy Systems, Inc.

Proton Energy Systems, Inc. designs, develops, and manufactures Proton Exchange Membrane, or PEM, electrochemical products that it employs in hydrogen generating devices and in regenerative fuel cell systems that function as power generating and energy storage devices. Proton's HOGEN(R) hydrogen generators produce hydrogen from electricity and water in a clean and efficient process using its proprietary PEM technology. For more information visit http://www.protonenergy.com

About Distributed Energy Systems Corp.

Distributed Energy Systems Corp. (Nasdaq: DESC - News) creates and delivers products and solutions to the emerging decentralized energy marketplace, giving users greater control over their energy cost, quality and reliability. As the parent company of Proton Energy Systems (http://www.protonenergy.com) and Northern Power Systems (http://www.northernpower.com), Distributed Energy Systems delivers a combination of practical, ready-today energy solutions and the solid business platforms for capitalizing on the changing energy landscape. For more information visit http://www.distributed-energy.com .

This press release contains forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Statements contained herein concerning Proton's and Distributed Energy's goals, guidance, revenue projections and other statements that are not statements of historical fact, including statements concerning the fuel cell demonstration project, may be deemed to be forward-looking information. Without limiting the foregoing, words such as "anticipates", "believes," "could," "estimate," "expect," "intend," "may," "might," "should," "will," and "would" and other forms of these words or similar words are intended to identify forward-looking information. Proton's and Distributed Energy's actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. Proton Energy Systems and Distributed Energy each disclaim any obligation to update these forward- looking statements. Factors that could cause results to differ materially from those contained in Northern's and Distributed Energy's forward-looking statements include, but are not limited to, failure of our products and systems to perform as specified or achieve commercial acceptance, the impact of competitive products and systems and other factors detailed in Distributed Energy's Form 10-Q for the quarter ended June 30, 2004, and other filings Distributed Energy may make from time to time with the SEC.