You are correct in your assessment. Connecting Neutral to Ground at the generator and having a solid neutral connection from the utility service through the transfer switch creates a parallel neutral path. This is generally a code violation (NEC Article 250.36, which prohibits the grounding electrode connection at the generator when transferring the load).Here's why a 3-pole transfer switch (or 4-pole, see later) and removal of the N-G bond at the generator is the proper solution: Eliminates Parallel Neutral Path

With a 3-pole transfer switch, the neutral conductor from the utility is switched. This means when the generator is supplying power, the utility neutral is completely disconnected. Since the N-G bond at the generator is removed, the generator becomes a non-separately derived system (SDS). The neutral path for generator-supplied loads now runs only from the generator, to the load, and back to the generator's neutral.

Ensures Single Point of Grounding

All grounding should occur at the service entrance. This ensures a single, defined ground reference point for the entire system.

Safety and Code Compliance

Parallel neutral paths can lead to: Stray currents: Current can flow on metallic objects like water pipes, gas lines, and communication cables, creating a shock hazard. Overheating of the neutral conductor. Incorrect operation of ground-fault protection devices (GFCI, AFCI). Violations of the National Electrical Code (NEC).

Here's a breakdown of how to proceed


Remove the N-G Bond at the Generator

Locate the point where the neutral and ground conductors are bonded at the generator. This is often a bonding screw or strap in the generator's connection box. Carefully disconnect it. Ensure the generator's frame is still properly grounded back to the service entrance via a dedicated equipment grounding conductor (EGC).2.

Install a 3-Pole Transfer Switch

A 3-pole transfer switch will switch phases A, B, C, and neutral.3.

Grounding Conductor

Ensure a proper equipment grounding conductor (EGC) runs from the generator to the service entrance ground. This wire must be sized according to NEC Table 250.122 based on the rating of the overcurrent protective device protecting the conductors feeding the generator.

Important Considerations and clarifications regarding your one line diagram



Equipment Grounding Conductor (EGC) Missing from Generator

The one-line diagram does not show a dedicated equipment grounding conductor (EGC) running from the generator back to the service entrance. This is absolutely essential. The generator frame must be bonded to the service ground.

Overcurrent Protection

Verify the overcurrent protection for the generator circuit is properly sized based on the generator's output and the ampacity of the conductors.

Generator Nameplate

Check the generator's nameplate. It should state if it's designed as a separately derived system or not. Some generators are designed to be either SDS or non-SDS, depending on how they are wired.*

Local Codes and AHJ

Always consult with your local electrical inspector (Authority Having Jurisdiction - AHJ). They have the final say on code compliance.

In summary, removing the N-G bond at the generator and using a 3-pole transfer switch (switching the neutral) is the correct approach to avoid a parallel neutral path and comply with the NEC. Ensure a dedicated equipment grounding conductor is installed between the generator and the service entrance ground.One More thought: Some people still prefer to use a 4-pole transfer switch. The advantage to the 4-pole switch is that it will still switch the neutral, but it also switches the ground. This offers the highest level of protection from stray voltages, and also will isolate the ground from the utility. The cost of a 4-pole switch vs a 3-pole switch is very minor. Flag for review