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Why you need ground wire
What does the ground do?
To the homeowner
, the purpose of ground wire is to protect people, circuits, and property from short circuits and possible fire by providing unobstructed path to earth. Less known is that the ground assists and protects the circuit breaker.
The ground functions as the direct pathway for Type 3 surge protectors, for example a surge protection strip on a computer. The ground wire is not necessary for Type 1-2 surge protectors that absorb surge instead of redirecting surge to earth. However in event of massive surge overload, or lightning strike, the ground wire assists in minimizing damage.

To the grid, the function of ground wires and ground rods at each home, business, pole, substation, transmission tower, all bonded together by the Neutral wire back to power plant, is to provide an array of earth connections that 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.' Extreme overloads on transmission and distribution lines that exceed capacity of ground will cause breakers to trip at substation.
Resource:
How to wire surge protection: single and 3-phase
What is electricity
Power plant to end user
Electrocution: People get electrocuted, because they become the pathway for electricity to reach earth,. The ground wire helps reduce the risk. A properly installed ground should have no resistance, while a person's body has resistance, so the ground wire offers easiest pathway to earth. However, the ground wire and breaker cannot protect someone exposed to live electricity while standing in water or on bare soil. For that protection, make sure to avoid such hazards and install ground fault interrupter (GFCI) on any vulnerable circuit, such as bathroom, kitchen, and outdoor outlets, switches and equipment. The GFCI will interpret and cut-off the rush of power going down the wire before a person becomes the pathway to earth.
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 triming. Use insulated ladders.

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 amperage 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 has large short, the breaker won't trip, and if you touch recirculation pump 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 current 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.
Resources:
Water heater recirculation pumps
How to wire GFCI
Solar safety

Ground wire for outdoor equiptment
All outdoor pool and electric panels and solar insttallations 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.
Buy:  
Ground rod and clamps
Bonding lugs

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Best basic electric book
Basic electric book/ very detailed
Grounding workbook
Bond motor to ground Outdoor Pump or pump in wet location must be bonded. or grounded, directly 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 local ground rod
Outdoor control panel and pool pump must be bonded 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.

Buy:
 
Ground rod and clamps at Amazon
Bonding lugs

Resources:
Basic household wiring
See inside main breaker box
What is 3-phase electric
How to wire T100 series timers
How to wire Control centers
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 or Justanswer via my website.
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 impedence.
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
Basic electric book Basic electric book

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House wiring

Resource: My simple illustrations and wiring:
Do it yourself electric
How to wire residential electric
How to wire commercial 3-phase
Power plant to end user power pole
Power pole to residential breaker box
Power pole to commercial breaker box


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electric book Electric books: More technical
Lineman's electric book
Power generation by Singh
3-phase power generation book at Amazon
Electric Power generation books at Amazon
3-phase wiring books at Amazon

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.

Resources
What-is-3-phase-electric
See-inside-main-breaker-box
Basic household wiring
circuit breaker Circuit breaker resources
Water heater is tripping breaker
How to replace circuit breaker
How to wire gfci
Can AC breaker be used for DC breaker
How to reset circuit breaker
Not enough space for circuit breakers
Circuit breakers
How to install subpanel
Why you need ground wire
Match breaker and wire size
How to wire subpanel
See inside breaker box
How to wire safety switch
How to wire whole house surge protector
Transfer switch
Use twist lock plug for extension cord that plugs into compressor
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
Buy:
Leviton 2711/ 125-250 volt/ 20-30 amp/ 3 pole
Resources
How to wire subpanel
How to wire transfer switch
30 amp safety cut off
Safety switch
Fusable pull out
Fusable pull-out
Pull-out disconnect -or- Non-fusable Safety cut off 
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
How to wire safety switch
Buy:
Pullout Disconnect at Amazon
Fusable pullout disconnect
2-pole 30 amp fusable safety switch/ power cut-off
2-pole 60 amp non-fusable safety switch
Additional links
Electricity leaves power plant Electricity:
Power plant to end user power pole
Power pole to residential breaker box
Power pole to commercial breaker box

How to wire residential electric
How to wire commercial 3-phase


How to wire Dayton OFF-delay timer

How to wire off-peak water heater

240 V Intermatic water heater timer

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