In plain English, each power wiring system must have exactly
one ground-to-neutral connection, called the ground bond. In
a home it's a connection between the breaker panel enclosure and
the neutral bus bar. Same story for a generator used by itself:
one gound bond from neutral to frame. If we connect the 
genny to a house panel, one of the bond connections should
 be removed. Usually it's the one at the generator. For the
details of why read on.

For pedants, some terminology. "Service entrance" is usually 
located at the building's main breaker panel. Ground and
neutral are bonded at that place. 

A "separately derived system" is one that has no conductor
common to another circuit. A transformer is a good example. The
primary winding is not separately derived, because it has conductors
that go somewhere else, usually the service panel. The secondary winding,
however, is isolated. It has no conductor common to the primary,
nor anything else, and so is said to be "separately derived". An
expression often used is "floating", among electonics folks.

A "ground fault interrupter" or GFI is a protective device which
detects imbalances in hot-side and neutral-side current. The term
is a gross misnomer, as a GFI has nothing to do with ground. It's
a complement to overcurrent protection, intended to prevent shocks.

Early in the use of electricity for telegraphs it was discovered
that the earth is somewhat conductive. That let telegraphers use a
single wire for the signal, with the return path through the earth. 
It works, but only because telegraphy used relatively small current
and relatively high voltage compared to available sources and loads.

For transmitting useful amounts of power, two conductors are needed
to form a complete circuit, earth is too resistive and unpredictable.
That leaves the question of grounding or not, and if so, where?

A real, physical circuit will work fine with no ground connection.
However, that leaves the potential of the components set by leakage
currents on insulators and atmospheric effects, notably lightning,
to define component potentials. Moving objects can pick up a charge,
for example raindrops in a cloud, or a hand moving over a cat's fur,
without any explict connection. It's desirable to selectively connect 
one point on any electrical circuit to a prominent reference. That 
reference is  the earth, thus the term "ground".  

This is where the terms "hot", "neutral" and "ground" come into play.
Electrical machines usually had a conductive structure or frame.
That's something which humans will unavoidably touch, at least sometimes
while simultaneously touching the earth. Clearly, we don't want any
potential difference between the earth and something we can touch. 
So, we connect it to the earth as best we can. 

Now, what about our current-carrying circuit? It'll work without
any connection to the earth, so why bother? Because, with no 
connection at all to earth its potential will be defined by
unpredictable currents flowing as leakage in insulators, electrostatic
currents from air movement or, worst case, lightning. By bonding
one point in the current-carrying circuit to the stuff we're all
standing on we can ensure that the maximum normal voltage stress 
across the insulation will be approximately the working voltage. 
That turns out to be desirable, so we connect (bond) one point on 
the current-carrying circuit and that segment is referred to as 
the "neutral" side. The other side of the circuit is thus "hot". 
"Ground" isn't part of any circuit: It's a reference connection 
only. If  current flows in a ground wire something's amiss. 

The bond connection carries _no_ load current, only leakage or fault
current. If there is an insulation fault that connects the hot side
to the frame, the bond allows current to return to neutral and trip
the overcurrent protection. In this way using grounds protects us,
but only by turning a hidden fault into an obvious one, a tripped 
breaker.

Problems arise if there is more than one connection between neutral
and ground: Neutral current can enter the ground and be misinterpreted
as a fault current. That sets off things like ground fault interrupters
if the extra bond is between the GFI and its load. It's a violation of
code and a source of confusion for electricians looking for faults.

Some appliances, notably electric dryers, often use 120 volt motors
and controls but 240 volt heating elements. Traditional practice was
to simply use the ground wire to handle the resulting neutral current.
It works just fine, until the ground wire is mis-connected or missing.
Then the dryer cabinet goes up toward 120 volts, where it's very easy
for someone to touch it and possibly some other (correctly) grounded
surface, like a pipe or washing machine cabinet. Modern dryer outlets
have four wires with a dedicated neutral.  

Generators (or inverters) are by nature separately-derived-systems. 
They have no intrinsic connection to ground, so can be given their own
or connected to share a ground that already exists. Used as portable
devices, there is a neutral bond between neutral and generator frame.
Being portable, there's no requirement for a ground electrode. Indeed,
by floating the generator frame it's impossible to get a shock unless
one touches both hot and neutral, both of which are inacessible normally. 

Connected to a service entrance, which already has one neutral bond
and an earth ground, the generator's bond must be removed to achieve 
compliance if permanently installed. Portable installations seem to
simply ignore the generator bond, since the generator isn't usually 
connected. If it causes problems for the generator's GFI protection 
it must be removed, then put back when the generator is used alone. 

To see how the extra bonding connection causes trouble, consider a
case where a GFI-equipped, ground bonded generator is connected to
a GFI-equipped bonded panel. Generator current goes out to the panel, 
out of the panel's GFI and returns on the monitored neutral. No 
problem so far, but the current next reaches the panel's neutral bus. 
The neutral current can now divide via the panel's bondwire to flow 
back to the generator on both neutral and ground, so the generator's 
GFI detects an imbalance between hot and neutral current and trips off. 
Removing either bond wire will force the return current back to the 
generator neutral, satisfying the generator's GFI. 

Thus, a bonded neutral on a temporary generator will not interfere
with GFI devices in a building's panel but it will interfere with
GFI devices on the generator. Some generators have GFI receptacles
for 120 volt loads and non-GFI receptacles for connection to bonded
panels. If all receptacles on the generator are GFI-protected, the
formally correct option is to disconnect the neutral bond jumper on
the generator. Another option is to simply omit the ground connection
between the generator and inlet receptacle. Fault current on the
grounds can still communicate via the neutral wire. This approach
isn't likely to pass muster with any inspector interested enough
to notice.


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