FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person * Nagaraj Varun   2. Issuer Name and Ticker or Trading Symbol ECHELON CORP [ELON] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) Sen. VP Product Mgmt & Mktg. (Last) (First) (Middle) 550 MERIDIAN AVENUE 3. Date of Earliest Transaction (Month/Day/Year) 05/10/2012 (Street) SAN JOSE, CA 95126 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 05/10/2012   M   8,750 A (1) 8,750 D   Common Stock 05/10/2012   F   3,209 D $ 3.88 5,541 D   Common Stock 05/10/2012   M   20,000 A (1) 25,541 D   Common Stock 05/10/2012   F   7,336 D $ 3.88 18,205 D

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Performance Shares

(1)

05/10/2012

M

8,750

(2)

05/10/2015

Common Stock

8,750

$ 0

26,250

D

Performance Shares

(1)

05/10/2012

M

20,000

(3)

04/01/2015

Common Stock

20,000

$ 0

20,000

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
Nagaraj Varun 550 MERIDIAN AVENUE SAN JOSE, CA 95126			Sen. VP Product Mgmt & Mktg.

Signatures

/s/ Kathleen B. Bloch, attorney-in-fact for Varun Nagaraj		05/14/2012
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	Each performance share represents the right to receive one share of the Issuer's Common Stock.
(2)	8,750 of the 35,000 shares granted to the Reporting Person under the Issuer's 1997 Stock Plan (the "Plan") were vested and released to the Reporting Person effective May 10, 2012. Such 35,000 share grant vests at the following rate: 1/4th of such shares on May 10, 2012 and on each one year anniversary thereafter.
(3)	20,000 of the 40,000 shares granted to the Reporting Person under the Plan were vested and released to the Reporting Person effective May 10, 2012. Such 40,000 shares vest at the following rate: 20,000 shares on May 10, 2012 and 20,000 shares on May 10, 2013 assuming in each case that the satisfaction of certain performance criteria has been met. It was determined that May 10, 2012 was the date on which vesting of 50% of the original 40,000 share grant was deemed to have occurred pursuant to the satisfaction of certain performance criteria.

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