Spaces vs Circuits
First let's explain the 8/16 thing, or "8 spaces but 16 circuits". At some point, panel manufacturers developed what I (alone) call a "double-stuff" breaker, which crams 2 breakers into a single space. This is intended to solve crowding problems in too-small panels.
photo source: Home Depot
Relying on these, marketing called their boxes 2X-circuit (X-space). Around 2014 they mysteriously stopped doing that. Recent NEC changes required AFCI or GFCI breakers on damn near every circuit... AFCI and GFCI are not made in double-stuff breakers.
Your 16/8 service panel is a legacy of that bad labeling. You have an 8-space panel, intended to replace an 8-space fuse box.
Panel space is dirt cheap. Go nuts.
You are dreaming of a 16-space panel. And even that is dreadfully small and you will find it rather limiting even with 100A service.
The practice of many electricians is to give you the smallest panel possible. That's first, to force you into more subpanel work if you expand further (more money for them) and second to save themselves $20 in part cost.
The cost of a larger panel is trivial tiny compared to total project cost. It is very correct to be extreme. Please spend an extra $100 for a 42-space panel, unless you just can't make it fit. Honestly I'd go 60-space. Not least, those larger panels are 225A-ready.
You never know. You might do a kitchen remodel and go hey, I'd like a separate circuit for refrigerator done microwave done dishwasher done disposal done 3 outlet circuits done. You have the space.
When you buy a PC, do you really calculate your needed hard drive space and buy just what you need... Or do you just buy the big 3TB drive? Of course you do. Same thing here.
More work to do at the meter
OK so the power company says their side of the cable is 320A. If they say so.
They say their meter is 320A. If they say so.
But your meter housing is not 320A.
To support more than the listed 125A, you will need to upgrade your meter housing. There's no question of that. That's your equipment and you have to pay for it, probably, unless your power company does something different with cost sharing.
You won't be able to replace parts of it, you will probably even have to replace both sides of it as a single unit. However it is very nice to have your main breaker in the meter. It means you can fully de-energize your main panel, which makes it safer for you to do yourself.
The 320A may be shared
Since it's multi-unit, the power company provisioning 320A makes more sense. Trouble is, this 320A service is probably shared between both units. So it's not as much as you think.
You really need to talk to your power company about what they consider this "320A" to be. It may be a relabeling of what other power companies call 400A service. So they may be willing to feed two 200A panels, or 100/100/200. This is a conversation you can have only with them.
More food for thought is sub-metering units, and separately metering common spaces. The new thing in rental properties is to have one main meter and the landlord has sub-meters per tenant. Many landlords prefer (and some law requires) commons space usage to be on a separate (sub) meter, i.e. heating, yard and commons lighting, anti-freeze pipe wrap or roof/gutter heat, coin laundry, Christmas decorations etc.
In my non-expert opinion and based on limited personal experience, the key phrase is:
electrical service is modified or upgraded
TL;DR You are not modifying or upgrading your service so the new rules don't apply
A very common situation is that an older 100A (or similar, anything less than 200A) service is upgraded to 200A. That is a heavy up. It is commonly done when the original panel is replaced, whether the reason for the replacement is:
- Increased electric power demand (i.e., actually need a heavy up)
- Replace a dangerous panel (Zinsco, etc. or damaged due to corrosion, etc.)
- Add more circuits (this can be done to a limited extent by adding a subpanel, but there are often practical limits to what you can do without replacing the main panel)
- Replace Rule of 6 panel with a main breaker panel
- Add GFCI and/or AFCI breakers if no GFCI or AFCI breakers are available for the old panel
- Add a generator interlock
- Add solar power
- Add whole house generator or battery backup
Only the first of these requires an increase in service. But many utilities and/or jurisdictions will use the excuse of a full panel change with existing service below 200A to be treated as a heavy up. Once you are in a heavy up situation, in certain respects it is very much like new service. In particular, everything from the utility pole to the main panel is likely to be replaced.
In reality, not everything needs to be replaced. For example, if the meter was already replaced with a 200A-capable smart meter then it is very likely that the utility will reinstall the exact same meter when done. Or the feed wires (service drop) from the pole to the weatherhead may have been replaced a few years earlier when the utility upgraded wiring in the entire neighborhood and so those wires are already 200A capable (but then again, they may do it anyway...). Or the utility may choose to not replace the service drop until they determine (based on the smart meter) that you regularly exceed a particular demand level.
But once they are, at least nominally, requiring replacement of everything from the pole to the main panel, they can require upgrade of any of those components to current (per local rules/NEC) standards. That can include requiring an outside disconnect at the meter.
It should not include surge protection as that is normally inside your main panel and straight functional replacement does not normally trigger upgrade requirements. Move the main panel to a different place in the house or make the old main panel a subpanel with a new main panel on the other side of the house feeding it and you likely will need to add surge protection.
Similarly, main panel replacement (heavy up or not) does not normally trigger requirements for GFCI and AFCI on any existing circuits. Add new circuits and the requirements apply.
Nor does it trigger requirements to have dedicated bathroom, kitchen or laundry circuits - if they were legal when originally installed and you are doing a straight replacement of the panel at one end of those circuits then you don't need to suddenly add more circuits to meet the latest rules. But renovate a bathroom at the same time and the rules will likely apply.
But your situation is a little different. It is not a heavy-up because you already have 200A service. With a heavy-up the utility would pull the meter and you would need a new meter pan and a new cable from the meter to the main panel, you don't need any of that. You need the meter pulled so that the main panel can be safely replaced, but the service is not changing and the feed (pole to weatherhead to meter to main panel) is not changing. Therefore, there should not be any need to satisfy any new requirements in the "weatherhead to meter to main panel" area.
All that being said, a jurisdiction and utility could make such a rule. But as I understand it, that would not be the usual way things work with changes in the NEC.
Best Answer
If it can't be positively identified, it is not rated for anything and would need to be replaced. Have you checked the back of the deadfront cover for a label? Also if the utility supplied it, they may know what it is.
The service entrance wiring (from service lateral to main breaker) must also be rated for 200A, so must be 4/0 aluminum or 2/0 copper. The Tesla to old main panel wiring is not anywhere near 4/0. You also need to look at the service lateral to meter wiring, if any.
I don't know what's more clever - the Tesla disconnect intended to sit under a meter, or the idea of a second meter pan in series to accommodate it! But it's getting pretty crowded out there. I would look for options to consolidate that down to 1-2 boxes. For instance a meter-main that is solar-ready, to replace the meter, could eliminate the right side box. A meter-main is also a big help with DIY repairs if you're into that, since you can fully de-energize the breaker panel.
I would also try to replace the panel interconnects with EMT or RMC conduit. It really ties the grounds together, removing necessity for ground straps.