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How Does My Home Electrical System Work?

Electricity is amazing and it powers so many wonderful things. Think about it.. an electrical system includes items that make everyday living easier. These include our lighting, fridges, and stoves to items that provide entertainment like our TVs, e-readers, and gaming systems.

An Electrical System Overview For Homeowners

Your lights don’t work or you get zapped. Then we realize we don’t even know how it works, let alone how to figure out and repair the cause of the problem. 

Well, we’re here to help you.

The following is an introduction to how our homes’ electrical system work. It covers all the basics of how electricity flows through your home and powers your devices. 

We also have an article about the common issues and how to fix them. You can check it out here.

The concept is pretty straightforward; electricity enters our homes from the grid and travels around a circuit, powering our devices, and then leaves our homes back to the grid. But in practice, our electrical system is very complex. For our purposes, this simple explanation will do.

Let’s delve a little deeper.

Electrical System Basics

There are two types of electricity; current and static. Our homes use current electricity and it works in a loop, called a circuit. 

Simply stated, it flows into and through our houses on the black hot wires (live wires) and flows out of our houses on the white neutral wire. 

Electricity needs a closed circuit to flow. When the circuit is open, electricity cannot flow. 

We open and close the circuit by turning on and off switches, appliances, and devices. For example, when you move your light switch to the on position, the switch closes the circuit, and electricity can reach your lights and turn them on. 

When you move the switch to the off position, the switch breaks the circuit, making it an open circuit and stopping the flow of electricity to the lights, turning them off.

Alternating Current & Direct Current

The electricity delivered to our homes is alternating current (AC). The majority of household devices and appliances use AC (e.g. washer and dryer, blender, microwave, etc.). AC doesn’t flow in one direction in the circuit. In fact, the electrons vibrate, but the why and how of it is too complicated for the purposes of this article.

Some devices use direct current (DC). For example, any device that uses a battery for power is DC, including devices with rechargeable batteries (e.g. laptops and cell phones). These devices have an adapter to convert the AC electricity coming from the outlet into the DC electricity used by the device.

From the Grid to Your Home

Electricity is generated by the utility and carried to your home through a combination of overhead and underground power lines. 

Older homes typically have an overhead service connection. Here, overhead wires run from the power pole to your house (the service drop), connect to the weatherhead (service head) and then connect to the utility’s electric meter.

Many newer homes have an underground service connection (a service lateral). The underground cables come up from the ground and attach to the electric meter before entering your home.

The utility is usually responsible for the electrical system up to and including the electric meter. However, some utilities have designated the wires from the property line to the house as the property owner’s responsibility. Though you probably can’t work on them without permission from the utility.

Everything Past The Electric System Meter Is Your Responsibility

If you think there is a problem with the utility side of things, give them a call. You don’t want to put yourself in danger mucking about on their side of the meter. They have the expertise and equipment to repair any issues on their side of things. 

If you are responsible for the wires from the property line to your house, still call the utility. They can advise you and guide you on your next steps. Some utilities, like Epcor, will repair the problem free of charge and some won’t, like Enmax. 

Either way, you will probably be on the hook for excavation and landscaping costs if your service is underground. 

Check with your utility to see what your responsibilities are as a homeowner. 

Also, check with your insurance company. Some policies will cover this work, though you may have to purchase an additional endorsement or rider for the coverage.

Electrical System in Your Home

Once the electricity has reached the electric meter it enters your house. 

Main Panel

When electricity enters your home, it connects to your main panel. A typical connection from the utility to the main panel has three wires: two black 120 V wires and one white neutral wire. 

Newer houses have a 200 amperage service but older homes usually only have a 100 amperage service. Some only have a 60 amperage service. 

A 60 or 100 amperage service is enough for some households, but not for others. If you use a lot of electrical devices or use devices that use a lot of electricity, (e.g. air conditioning, hot tubs, electric car charger), a 60 or 100 amperage service may not be enough and you will need to upgrade. 

The main panel distributes electricity throughout your house. It is sometimes referred to as a fuse box because before circuit breakers, we used fuses and some old houses still use them. If you still use fuses, we highly recommend upgrading to the safer circuit breaker system. 

Your Main Panel Contains:

Main Circuit Breaker

The main circuit breaker — also called the disconnect — is a switch which turns on or off power to your entire house. 

It should also have written on or near it the total amperage capacity for the panel. 

The two black thick 120 V hot wires from the utility enter the main panel and connect to the main circuit breaker via two lugs. 

Sometimes this switch can be located outside and is called an outdoor service disconnect, though this is very rare in Canada. 

Bus Bars

Hot Bus Bars-

Two highly conductive hot bus bars extend from the main circuit breaker. Each one carries 120 V of electricity from the main circuit breaker to the individual circuit breakers which are attached to the bus bars. 

Neutral Bus Bar-

Electricity returns to the main panel from the branch circuits on the neutral wire which attaches to the neutral bus bar. The neutral bus bar is connected to the main service neutral and returns the electricity back to the grid. 

Circuit Breakers

The circuit breakers are the various switches in the panel. They attach to — clip onto — the hot bus bars and control the electricity to the branch circuits. These will trip — shut off the electricity to the circuit it controls — when it senses a potential safety issue, like an overloaded circuit. 

To determine which breaker controls which circuit, consult the breaker map. It should be posted on the inside of the main panel door. If there isn’t one, we recommend you develop one.

Single-Pole Breakers-

Most breakers in your panel are single-pole circuit breakers and attach to one bus bar and carry 120 V. 

Double-Pole Breakers-

You will notice one or two larger breakers. These are double-pole circuit breakers. They are connected to both bus bars and carry 240 V so you can power your larger appliances, like your dryer. 

AFCI Breaker-

An arc-fault circuit interrupter (AFCI) breaker has an extra safety feature. It can also detect arc-faults and will shut down power to that circuit if one is detected. 

Arc-faults are potentially serious and can cause a lot of damage, even fires. 

AFCI breakers come in both single-pole and double-pole models.

GFCI Breaker-

A ground-fault circuit interrupter (GFCI) also has an additional safety feature. They can detect ground-faults. When one is detected, the GFCI breaker turns off the electricity to the affected branch circuit.

GFCI breakers come in both single-pole and double-pole models.

There are also GFCI outlets that detect ground-faults in a single outlet. They have a reset button that you press to restart the electrical current. They protect you from electric shock and the outlet and devices plugged into it from ground-faults. They typically also protect the outlets and devices downstream — further along the circuit — from the GFCI outlet.

For more information on your main panel, check this out.

Branch Circuits & The Neutral Wire

From the main panel, the electrical current moves along wires through the various branch circuits making up your electrical system.

We’ve discussed how electricity flows into, through, and out of your home on a loop. For your home’s electricity to work, everything on your system needs a neutral wire — usually a white wire — that runs back to the main panel, through the electric meter, and back to the grid. 

If your neutral wire isn’t white, you need to investigate why? It has always been electrical code for a residential neutral wire to be white. If it isn’t, the installer wasn’t adhering to code. This could indicate other parts of your system were also not done to code and that could lead to problems.


Bonding is an important safety feature. It connects the conductive non-current carrying components in your home. The bonded items should then be connected to your grounding system (discussed below).

Conductive non-current carrying components include metal pipes (e.g., water and gas) and non-current carrying parts of the electrical system (e.g., junction boxes and conduits).

These items are not intended to carry current. However, because they are conductive, if electricity leaves the electrical system for some reason (e.g., short circuits, arc-faults, etc.), they can become the new path for the electricity to take. 

By bonding the items together, you create an alternate and safer route for the electricity to take if it leaves its designed path. 

The bonded items are then connected to the grounding system. This is what “bonded to ground” means. 


The final thing in this overview is grounding, also called earthing. Your electrical system must be connected to the earth. 

Damage and injury — because humans are conductive and electricity can and will use you as part of its path — can occur when electricity travels outside its designed circuit. Grounding gives the electricity another pathway to the earth if there is a problem with your system and the electricity cannot follow its regular route. 

Grounding also protects your house and the grid from lightning strikes.

A copper grounding wire connects the neutral/ground or ground bus bar in the main panel to either a buried copper grounding plate, a copper grounding rod that is driven deep into the earth, or a metal pipe extending into the house from an underground water supply. 

Under normal circumstances, the grounding system should not be carrying electricity. It only ever carries electricity in the case of an emergency and we hope you never have one. 

Under the current Canadian electrical code, our homes must be bonded and grounded. 

You’ve now had a peek behind the curtain into your home’s electrical system. As we said, it is simple in concept but complex in execution. There is more to it, but you now have the basics and should be able to talk with your electrician and understand what they are saying.

If you want to learn more, we encourage you to read What Are The Most Common Electrical Problems & How Do I Fix Them?. 


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