PowerFilm Raises GBP7.9 million for Further Capacity Expansion

13 June 2007, London, UK And Ames, Iowa

PowerFilm, Inc. (AIM: PFLM), the developer and manufacturer of thin flexible solar panels, today announces that it has raised GBP7.9 million ($15.6 million) by means of a placing of 2,633,333 new common shares at 300p to expand production capacity beyond targets previously outlined, due to continuing high demand for its range of products. PowerFilm's ongoing Phase One production expansion programme, to increase capacity from 1MW to 10MW by 2009, is on track and is fully funded by the proceeds of the Company's IPO in May 2006. The Company expects market demand for its products to exceed production capacity, even once Phase One production capacity is fully operational.

As a result the Company has decided to accelerate Phase Two of its production expansion plans. Phase Two aims to increase production capacity from 10MW to 24MW by 2010, principally by sequential roll-out of nine additional meter-wide production lines. The Company will use the net proceeds of the Placing to purchase and install the new machinery. Phase Two expansion is expected to be earnings neutral or earnings enhancing throughout the implementation period. Nomura Code Securities Limited ("Nomura Code"), the Company's Nominated Advisor, has placed 2,633,333 new common shares at 300p each to raise GBP7.9 million for the Company. In order to satisfy demand, Nomura Code has also placed 833,334 existing common shares at 300p each, to a value of GBP2.5 million ($4.9 million). The 2,633,333 new common shares are expected to be admitted to trading on AIM, a market owned and operated by the London Stock Exchange plc on Monday 18th June at 8.00am.

Frank Jeffrey, CEO of PowerFilm, said, "The progress we have made on expansion to date has been gratifying. We are pleased to have been able to offer shareholders a renewed opportunity to benefit from the upside that further expansion offers, while ensuring the company remains competitive in its marketplace".

Mike Coon, COO and CFO of PowerFilm, said, "This financing will enable us to take on more and larger orders and will take full advantage of the in house skills we have now established for construction and installation of new machinery, maximising returns for our shareholders".

For further information, please contact:

PowerFilm, Inc.	+1 515 292 7606, ext. 102
Frank Jeffrey, Chief Executive Officer
Mike Coon, Chief Operating Officer and Chief Financial Officer
M:Communications	+44 20 7153 1547 / 1539
Patrick d'Ancona / Eleanor Williamson

A copy of this announcement will be available on the PowerFilm website at www.powerfilmsolar.com

About PowerFilm

PowerFilm, Inc. (AIM:PFLM), founded in 1988, is a developer and manufacturer of thin, flexible solar panels. The Company listed its shares on the AIM market of London Stock Exchange plc in May 2006, raising approx. GBP9.6 million ($18 million) to expand production capacity to meet growing product demand. The Company's principal target markets are portable and remote power, military, and building integrated solar power. PowerFilm has developed a proprietary thin film manufacturing process which consists of roll-to-roll manufacturing of solar cells using an amorphous silicon sunlight absorber layer deposited on a flexible plastic substrate. This proprietary manufacturing process includes an automated low-cost printed interconnect of individual solar cells within the overall solar panel. The thin plastic substrate on which the Company's solar panels are manufactured is as thin as 1/1000th of an inch (0.025 mm) thick, making them much thinner and more lightweight, flexible and durable than rigid crystalline panels, which enables easier integration and allows for simple, robust, low cost installations.

The common shares of PowerFilm, Inc. are traded in certificated form on the AIM market of the London Stock Exchange and are not registered under the US Securities Act 1933, as amended. Such shares may not be offered or sold to residents of the United States or to persons acting on their behalf, or to other persons who are "United States Persons" within the meaning of Regulation S as promulgated under the Securities Act of 1933, unless such shares have been registered under the Securities Act or there is an available exemption from registration.