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Why you need ground wire
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Two kinds of grounding:
1) Circuit or system grounding
(2) Equipment grounding


(1) Circuit or system grounding
transmissionFirst type of grounding is Circuit or system grounding... when ground wire is connected to earth at ground rod. This grounding is grid-wide, and also includes ground connection at the household service or breaker box, plus ground at each pole stretching across the grid from power station to end user.
'This is done to protect the grid against lightning strike or other high voltage contact. Grounding a system stabilizes the system so expected voltage levels are not exceeded.'
To the grid, the function of all the ground wires and ground rods at each home, building, pole, substation, transmission tower, all bonded together by the Neutral wire back to power plant, is to provide an array of earth connections that limit the voltages caused by lightning or accidental contact of conductors .... to stabilize the electrical system by redirecting fire hazards, shorts, power surges from lightning, and high voltage events to earth .... basically the Neutral-ground array lets earth absorb stray voltage and 'balance the equation' so the grid can remain operable. Extreme overloads on transmission and distribution lines that exceed capacity of ground will cause breakers to trip at substation.
Image on right shows the compression fitting that bonds Neutral wire to the ground wire on a distribution pole. The ground wire is connected to ground rod at base of pole, plus bare copper wire also travels to the bottom of pole where it is stapled into a coil, called the butt coil, to ensure earth connection.

To stabilize the voltage under normal operating conditions (which maintains the voltage at one level relative to ground, so that any equipment connected to the
system will be subject only to that potential difference).

(2) Equipment grounding
Second type of grounding is Equipment grounding ...when 'all metal equipment and enclosures containing electrical equipment or conductors are grounded by means of a permanent and continuous connection or bond.' This includes ground wire at each outlet, switch, ceiling box etc. 'Equipment ground creates a path for fault current (short circuit) to return to the system ground at the supply source of the circuit if an insulation Stick menfailure takes place. If installed properly, the equipment grounding conductor (ground wire) is the current path that enables protective devices, such as circuit breakers and fuses, to operate when a fault occurs.'

To folks at home or workplace
, the purpose of ground wire bonded to the ground rod is to protect people, circuits, and property from short circuits and possible fire by providing unobstructed, low-resistance (measured in ohms), path for electricity to reach earth.
The ground wire offers a low-resistance path (or open path) for short circuit to reach earth without going through a human or exploding out of a wire or electrical device and causing fire. The human body offers a fair amount of resistance. Other electrical devices also offer resistance. Resistance pushes back against the flow of electrons (current or amps), causing the electrons to slow or stop. Since voltage is always pushing the electrons, the electrons will take whatever route is open, or offers least resistance. Since the ground wire offers lower resistance than a human body, the voltage will push the electrons amperage through the ground wire instead of a person's body, and so the ground wire can protect people and circuits if the voltage is not extremely high and the person is not standing or leaning into earth grounded soil or appliance etc.

Thresholds of electricity on human body
''Threshold of perception to 60 Hz AC between major extremities - 0.5mA . Muscle dysfunction "let go current' - 9 mA. Respiratory paralysis - 30 mA . Heart dysfunction - 75 mA. Cardiac arrest - 4 amps. Hazardous potential threshold, skin contact - 40 V. Skin contact resistance - 1K-5K depending upon conditions. Body resistance between major extremities - 500 ohms (exclusive of skin). Skin effects disappear as voltage increases, higher potentials being able to pierce the skin's protective layer.''

Less known, is that the ground also assists and protects the overcurrent devices such as circuit breaker and fuses, preventing extreme conditions of overvoltage and overamperage that will melt wires and cause fire.

Electricity is Volts and Amps. Voltage is the potential force between two different conductors (wires). Amperage is the flow of electrons on a conductor.
Volts are the amount of force that is pushing electrons, and Amps are the number of electrons getting pushed.
Household voltage remains relatively steady throughout the day (except during a surge event like lightning strike). While amperage changes throughout the day. Amperage varies by demand, increasing when appliance is ON, and decreasing when appliance is OFF.

Amperage, or electrons flowing on a wire, can exceed the capacity of a wire during a short circuit event (insulation failure).
Electrons are always slowed by the matrix or atomic structure of the conductor (wire) ... this is called resistance (or more exactly impedance with AC electricity).
Resistance is like friction that causes heat on the wire. During a short circuit event, resistance against the excessive number of electrons causes high heat that can melt wires and cause fires etc.
Circuit breakers (overcurrent protection) are rated by amperage, and respond to heat. Circuit breakers trip when heat exceeds breaker rating, but breakers do not trip immediately. Breakers are 'slow acting' and do not respond to a short circuit as fast as ground wire or GFCI.
The ground wire provides instantaneous pathway for excessive amperage (electrons), thus helping to absorb excessive heat until the circuit breaker trips. This assists the circuit breaker by keeping heat to a minimum, so wire and insulation, and breaker are not damaged during the sudden surge of electrons. If the ground wire offers too much resistance to the unobstructed flow of electrons to earth, this can be a source of damage and fire.

Another less known function of the ground is to help the GFCI circuit. A 3-prong grounded extension cord that is plugged into GFCI is generally considered safe. So if cord is frayed, and the person is standing in water, then the GFCI trips off almost instantly. However if the cord is not grounded, or the GFCI device is not connected to ground wire, or the ground wire offers high resistance [impedance], then the GFCI will not trip instantly. Instead there is a momentary delay. 'The person will feel a shock, but will usually not be harmed.' If a double-insulated, non-grounded appliance falls into a tub of water, and person reaches into water, there is no grounding, but as long as GFCI is functioning then then the shock will usually not harm the person. GFCIs fail and should be tested prior to use. The test button simulates short circuit that trips GFCI and confirms the device is working after being reset.
secondary surge arrestor
The ground also functions as the direct pathway for Type 3 surge protectors, for example a surge protection strip on a computer will jump the gap to the ground wire when voltage on line exceeds rating.
The ground wire is not connected to Type 1 and only indirectly connected to Type 2 surge protectors that absorb or suppress surge instead of redirecting surge to earth. Image shows Type 1 surge protector.

In event of massive surge overload, or nearby lightning strike, the ground wire assists in minimizing damage from surge. Lightning within 100 feet of home, and there is no protection other than lightning rods that shield property by redirecting voltage around the structure on copper conductors and into earth at several points. A lightning rod is a type of grounding, but is not connected to the electric system. If it was connected, the extreme power of lightning could seriously damage electrical circuits. Image shows lightning rod on top of metal roof.

Resource:
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Electric safety
-All voltages are dangerous. 120 volt is most common voltage for death from electrocution.
-When working on electric, always de-energize circuit. Wear tight clothes only. No loose clothes on sleeve, neck, legs, chest or abdominal areas. Remove metal from pockets, stand on dry boards.
-Remove jewelry rings watch metal before working on power. Always use non-conductive tools.  Use one hand when possible. Both hands give pathway for electricity to reach heart. Post warning signs. Do not reach into enclosures. Electric workbench should have insulated mat. Use insulated gloves. Equipment can have more than one power supply. Each box should be powered by one breaker, but sometimes not ... never assume power is off. Install safety switch within clear view of equipment. Make sure switch is in open or safety position before working on equipment. Protect power cords from sharp edges/ Replace worn power cords. Always cut power to tool that is jammed. Do not work on electricity with oxygen or other explosive vapors such as paint, gasoline, varnish. Close paint containers, store in separate, well-ventilated room. Note location of high voltage lines: Be cautions around incoming power lines when painting or tree trimming. Use insulated ladders. -Move indoors when lightning is within 1 mile.

-Oil, grease and carbon dust can accumulate on electronics and electrical equipment, producing potential hazard. Keep electrical equipment and electronics clean and covered. Be careful when soldering that extra solder does not drip on other parts causing potential short.

-Do not apply water to electrical fire. Use CO2 fire extinguisher Do not use foam fire extinguishers/ foam is conductive. Some electronic parts give off toxic fumes during fire. In event of fire, de-energize equipment, use CO2 extinguisher, ventilate room, avoid breathing smoke. Do not touch burned equipment with bare hands.

-Electrical dangers include death, injury, burns, falling down, getting hit by flying objects. During electrical shock, the muscles spasm causing person to clasp the electric device. Knock person loose with 2x4 or belt, rope, coat, blanket. Do not touch person or you will become electrified

-Person suffering from electric voltage shock: Lay them down. Keep from moving. Check if they are breathing. Continue artificial respiration. No stimulants or opiates because the heart might be affected by electric shock

-Electric burn can cause pain, shock, open wounds. Wash minor wounds with soap clean water apply cold water. Deep open bleeding wounds, use sterile compress, immediately call medial personnel.
GFCI
Larger image
If your appliance has 3-prong grounded plug, then that appliance can have short circuit that travels to the outer shell of appliance, and this short can kill you if appliance is not grounded or you are exposed to live electricity while touching a grounded surface. That's why UL rated appliances and the national electric code are important. Many parts of the world have neither, although the importance of reliability is rapidly changing how the world treats its power grids.

The ground wire is connected to outer shell of appliance, and travels back to main breaker box, and then to ground rod outside home.

For example water heater recirculation pump has 3-prong plug. If recirculation pump gets a short circuit, then the ground wire will carry electricity safely away from pump, and away from water pipes.

If the ground fault is slight and not large, then breaker will NOT trip, and ground wire releases the small current into ground rod located outside house near main panel ... and it is generally safe to touch recirculation pump.

If the ground fault is large enough, it will begin to pull more current through shell of appliance and into ground wire and down to the ground rod, and that current will overheat wire at breaker, and breaker will trip. It will happen very quickly, but until breaker is tripped, the live current is available on the outer shell and can still kill you.

If you do not have ground wire, and recirculation pump has large short, the breaker won't trip, and if you touch recirculation pump with this condition while standing on bare ground, or while touching water pipe, or leaning into metal washing machine, or taking shower etc... you can fry like a fish, as electricity finds easiest path down to ground. This is why grounding is important.
IF you have GFCI or arc-fault breaker on the circuit, then the slightest ground will trip breaker before it becomes dangerous. GFCI is not a substitute for properly installed ground wire.
Resources:
Water heater recirculation pumps
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Ground wire connected to water pipe?
Using water pipes for ground is unsafe and less-than-best-method.
In the past, it was common to use water pipe as the household ground rod by clamping main breaker panel ground to the  galvanized pipe. Generally the idea worked fine because outdoor water pipes are buried underground to prevent freezing, and normally long enough to offer zero resistance for grounding purposes.
Problems happen when stray current flows along the pipe. Even a trickle of current increases reactivity to rust and can accelerate deterioration of steel, most notably galvanized pipe and steel water heater tanks. Copper pipes do not deteriorate in same condition, but advent of plastic pipe makes the ground connection uncertain when water pipes are used.
Today, proper grounding requires ground rod or ground rod array that meets local soil conditions.

Ground wire for outdoor equipment
All outdoor pool and electric panels and solar installations must be grounded. Check local electric codes.
What does this mean? Drive ground rod 8-10 feet into soil or best to consult local code for grounding specs. Connect or 'Bond' #6 bare copper  or green-coated ground wire to ground rod and to solar panels and pipes on roof. Do the same for pool equipment, control panels and any outdoor subpanel.
Do NOT ground to water pipes. If electric system, antenna, or other metal is grounded to water pipes, then stray current corrosion can cause pipes to deteriorate. Also uncertain bond to ground because of plastic pipes. Always ground to a ground rod.
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Bond motor to groundOutdoor Pump or pump in wet location must be bonded to a ground wire that is connected to ground rod...plus connected to the ground wire inside cable that comes from breaker box. Essentially this motor will have 2 grounds because the electrocution risk from outdoor equipment is high.

Ground all electrical devices, and make sure all household grounds are tied together and bonded to main breaker panel and to ground rod. Inspect outdoor ground rod to ensure proper connection of wire to rod. de-energize main breaker to work on ground rod.
Do not ground to water pipe: Make sure ground is connected to ground rod.
Water heaters and metal water pipes corrode with stray current corrosion.
Modern pex water lines and plastic pipe cannot be used as a ground.
When installing new water heater, water pipe, doing repairs on plumbing, installing new electric service etc... check that all electric is connected to dedicated ground wire that is bonded to outdoor ground rod
Bonded means the steel surface is directly connected to ground wire that is in turn connected to ground rod.
Outdoor control panel and pool pump must be bonded to ground wire that is connected to ground rod located at point of installation/ local codes vary so consult local electrician/ some codes may allow bonding to metal conduit that enters the soil at point of installation... but stray current corrosion can cause deterioration of this conduit/ codes vary for grounding for many reasons. Different soils offer different resistivity to grounding/ for example dense warm wet soils conduct to ground better than loose cold dry rocky soils.

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Bond solar panel to ground rod Bond all ground wires together in areas prone to lightning to help prevent lightning damage.
Bonding all grounds together will help prevent damage from lightning strikes beyond 100' away...
Strong lightning strikes within 100 feet must be handled by lightning rod. No system other than lightning rods will protect against direct lightning strike or strike within 100 feet.
Move indoors and do not stay on roof, or move metal ladders, or touch anything made of metal when lightning is within 1 mile or can be heard or seen.
Local code often requires bonding in areas with high incidence of lightning: this includes all ground rods for satellite, TV, phone, solar, electric panel, subpanels (within 100 feet) etc must be connected together and bonded to main electric panel ground rod driven into soil at correct depth to meet local code. Consult local electrician.
Codes for grounding depth vary: loose cold rocky dry soils are less conductive than dense warm wet soils. When soils are less conductive, the ground must be driven deeper or ground array installed to reduce impedance.
Lightning
100' feet away for lighting is the rule of thumb.
Anything closer than 100', and nothing can protect against the voltage.
Beyond 100' and installing proper grounding can help redirect the surge into the ground.
Proper grounding requires all boxes and devices to be connected with a ground wire that is adequately connected to a ground rod that is at sufficient depth to reach permanently damp soil, or an array of ground rods with sufficient low resistance to meet local code, and that all grounds rods are bonded together with a common wire. For example if you have a ground rod for satellite TV and separate ground rod for electricity, they should be connected with a common ground wire of bare copper or green-coated copper wire.
However the ground wire will not protect electronics etc from damage from lightning ... for this you need a surge protector, suppressor, arrestor etc.
Note: surge protection wears out over time ... because it is consumed by the continuous small and large surge found in typical electric service.
surge vs ground block Surge vs ground
Generally all Type 3 surge protectors must be grounded. But grounding is not surge protection. Instead the Type 3 will 'jump the gap' to ground wire when surge is encountered.
Type 1 and 2 surge protectors are not grounded, and instead suppress or absorb overvoltages.
A ground wire will NOT protect equipment from overvoltage .... unless the power exceeds device rating or causes failure so that electricity arcs to the box and follows ground wire to ground rod.
Surge protection is needed to protect equipment from overvoltage.
For example motors will cause voltage spikes etc that can harm other appliances.
Type 1-2 surge protection suppresses or absorbs overvoltage and anomalies in electric power.. Type 3 surge protectors, found on co-ax and phone lines and surge protection strips are designed to put excess voltage in the ground wire. In some cases, with lightning strikes, the overvoltage is redirected to the ground wire. So overall the ground wire is a necessary part of surge protection, but is not required for Type 1-2 surge protector.
Resource:
How to wire surge protector
Neutral compression connection to ground wireButt coil Copper ground wire at bottom of distribution pole:
Depth of pole into ground is determined by engineers during planning stage
Once the pole is set in the soil, the weight of pole helps the ground make contact with soil
Using a coil of wire on the the bottom or butt of the pole is common technique.
Using a butt plate is another method.

A butt coil is made from copper wire that is stapled to side of pole.
The copper wire is coiled on the bottom, and pieces cross each other to maximize contact.
In addition to the coil, a ground rod is also driven into the soil to depth that is specified by engineer.
Depth of ground rod is based on resistivity and dampness of soil.
The ground must reach soil that is permanently damp... and below the frost line
This installation is done in a damp Texas coastal region with clay soil.
Dense soil such as clay has less resistance to ground than dry rocky soil.
The best soils are dense, non-frozen, clay. The worse soils are loosely compacted gravel with a permafrost.
Grounding specifications vary by soil, type of pole, voltage, etc.

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Neutral and ground
Neutral and ground are bonded together at the service panel (breaker box) to provide safety and stabilization.
The neutral wire, or system neutral or service neutral wire runs throughout the electric grid ... from every home and business, across every pole, through every substation, back to the power plant... to 'stabilize' the entire grid.
The ground wire is bonded to the neutral at each step along the way. The ground protects each individual installation (pole, electric box, transformer etc) while the neutral 'stabilizes' the entire system. Both Neutral and ground are required.

Electricity always wants to flow back into the ground soil... and will do so with high speed and damaging effect if it lacks safeguards.
Neutral-ground system will safely route overvoltages or shorts to earth without arcing or bolts of electricity jumping from the hot wires to nearest object and causing fires and damage.
Since any material can conduct electricity if voltages are high enough, the Neutral-ground system is required to provide a quick and safe route to soil using ground wire, before voltages increase to point of arcing over to the nearest object.

By code... the neutral cannot be used as a ground... nor ground as a neutral... yet they are connected together.
As a general rule for household wiring... the neutral wire has to be as large as the hot wire... so the neutral wire can support the same amperage as the hot. While the ground wire can be smaller wire, for example incoming Hot and Neutral wires can be #2/0  but ground wire from the main service panel (breaker box) is usually smaller #6.
On a power pole the Neutral is always smaller than the Hot wire and the ground is smaller than the Neutral.

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Install 20 or 30 amp as needed.
X Y terminals go to either Hot,
W is always Neutral
G is ground
These are standard markings for 240 volt plugs and outlets.
Connect X to one hot busbar inside the transfer switch, connect Y to other hot busbar, ground and Neutral to respective terminals
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For indoor and outdoor installation:
Locate cut-off next to electric equipment ... or within easy reach... within sight of appliance.
Purpose to protect anyone working on electricity ... so person knows power is OFF, and power cannot accidently be turned ON.

Resource
How to wire safety switch

Residential information: varies by state and locale
Non-fusable safety switch required on outdoor installations, and high-voltage indoor applications such as 90 amp tankless electric water heater where breaker box not in plain sight of equipment.
fusable vrs non-fusable: Non-fusable means there is no breaker or fuse inside the cut-off box. Non fusable is manually-operated on-off switch for safety.
fusable means there is a fuse or breaker that trips when detecting high heat.

Resource
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