Okay, let's break down this generator inlet wiring scenario and address your questions and concerns.

Understanding the Key Principles Separated Neutral and Ground in Subpanel

This is a crucial point. Since your subpanel has a main breaker disconnect and is downstream of the main service disconnect, the neutral and ground must be kept separate. This is to prevent neutral current from flowing on the grounding conductors, which can create shock hazards.

Floating Neutral Generator

A generator with a floating neutral means that the neutral conductor is not internally bonded to the generator's frame. This is a requirement for systems like yours to avoid multiple ground paths.

Interlock

The interlock is absolutely essential for preventing backfeeding the grid and endangering utility workers. Ensure the interlock you use is listed for the specific subpanel and main breaker you have.

Bonding at the Main Service Disconnect

The main service disconnect is where the neutral and ground are bonded together, creating the single point where the electrical system is connected to the earth.

Addressing Your Questions1. Can the neutral and ground from the inlet box be moved from the sub panel to the main disconnect bonded neutral/ground bar? No, you cannot (and should not) move the neutral. The neutral from the generator must go to the neutral bus in your subpanel. If it goes to the main panel neutral/ground bus, this can cause dangerous issues. You should not move the ground wire. The generator ground must go to the ground bar in the sub-panel.2. Running Wires Through the Conduit



Capacity

1-1/2" conduit. You are correct to be concerned about conduit fill. Adding four #8 AWG THHN conductors to an already full conduit will likely violate code (NEC Chapter 9, Table 1 and Note 4). Overfilling conduit makes pulling wires difficult (potentially damaging them) and impedes heat dissipation.

Alternates Derating

With the new #8 AWG, you would need to derate the conductors based on the number of conductors in the conduit. This means you might need to upsize the conductors to #6 AWG to handle the 30A load. You will need to use NEC Table 310.15(B)(3)(a) to determine the derating factor based on the number of current-carrying conductors.

Use a separate conduit

The best solution is to install a new, dedicated conduit between the subpanel and the generator inlet location for the generator wiring. This eliminates the conduit fill issue and makes future work easier.

Recommended Wiring Configuration

Here's the recommended wiring configuration, based on your description: Generator Inlet Box

Connect the two hot wires (L1 and L2) from the generator inlet to a new 30 amp circuit breaker in the subpanel. Connect the neutral wire from the generator inlet to the neutral bus in the subpanel. Connect the ground wire from the generator inlet to the ground bus in the subpanel.

Interlock

Install the correct interlock kit on the subpanel. The interlock mechanically prevents the generator breaker and the main breaker in the subpanel from being on simultaneously. This is crucial for safety.

Conduit and Wiring

Run a new, separate conduit for the generator wiring, or be very cautious about conductor fill and derating. Use appropriately sized THHN conductors for the 30 amp circuit, taking into account any derating factors. #10 AWG will typically suffice for a 30A circuit, but you can use the #8 you have, as long as it fits in the conduit and the breaker terminals can accept that size of wire.

Why This Configuration is Correct Safety

This setup avoids creating parallel neutral paths, which can cause dangerous circulating currents on the grounding conductors.

Code Compliance

This configuration aligns with NEC requirements for separately derived systems (like generators) and the proper separation of neutral and ground in subpanels.

Functionality

The interlock ensures that you cannot backfeed the grid.

Important Considerations and Cautions Licensed Electrician

This project involves working with electricity. If you are not completely comfortable and knowledgeable about electrical wiring, hire a qualified and licensed electrician.

Local Codes and Permits

Obtain the necessary permits and inspections from your local building department.

Generator Selection

Ensure the generator you choose is compatible with your electrical system and has a floating neutral.

Testing

After installation, thoroughly test the system with the generator. Verify that the interlock functions correctly and that all circuits are working as expected.

Proper Grounding

Ensure the generator inlet box is properly grounded.*

Wire Size

Always verify wire size calculations to meet ampacity requirements.

Revised Wiring Diagram (Conceptual)

(Generator Inlet)              (Subpanel - 40 Spot)         (Main Service Disconnect)[L1] ------> (30A Breaker w/ Interlock) ------------------------>[L2] ------> (30A Breaker w/ Interlock) ------------------------>[Neutral] --> (Neutral Bus - Isolated)                           |[Ground] --> (Ground Bus - Isolated)                              
Subpanel Grounding Electrode System (Separate)
V(Neutral/Ground Bonded)

In summary: Keep the neutral and ground from the generator completely separate from the neutral/ground bond in the main service disconnect. Connect the neutral to the neutral bus in your subpanel, and the ground to the ground bus in the subpanel. Address the conduit fill issue, either by using a separate conduit or carefully calculating conduit fill and derating. Use an interlock device, and it is always best to have an electrician help you complete the project. Flag for review