Is it necessary that neutral be grounded? Why?

OK.. in a standard 220v configuration, the Line-to-Line voltage is 220 volts and the voltage from either Line to Neutral is 120 volts, the Neutral is bonded to ground. You plug in any 220 rated device and everything works fine. Next, imagine the Neutral-Ground bond is broken. All other relative voltages remain the same...the device still works because the L-L and L-N voltages are appropriate, but the Line (and Neutral) voltages are allowed to vary relative to ground. They could rise to very high levels (due to faults) to several thousand volts: Line1-Ground = 10120 volts, Line2-Ground = 9880 volts and Neutral-Ground = 10000 volts for instance. The equipment would still function normally, but there might be hazardous voltages present on the metal case. An ungrounded neutral bypasses safety systems that would prevent dangerous situations.

You have several questions and I will try to answer all of them:

Questions

1. Why is the neutral wire for U.S. residential must be grounded?

2. If the neutral wire is not grounded, the AC is floating and both hot and neutral will display voltage to ground.

3. Is there any sort of hazard or violation of NEC code

4. Describe a situation where this could be hazardous or otherwise incorrect?

Answers:

1. First to clarify, a system ground is not the same as a neutral. All U.S. residential homes have a neutral, not all have system grounds. Newer homes have a 4 wire feeder that is supplied from the meter to the main disconnect. The meter is supplied with a 3 wire from the transformer. Thus at the meter the ground and the neutral are tied together. Now to your question as to the why? The purpose of the ground is to redirect unwanted electrical charges away from your home to earth. The reason they are tied together at the main disconnect is because that is the primary source of entrance.

2. In the event the neutral is damaged your home might could use the earth ground instead if it has a good ground. This is not the purpose of the system ground but just an example of how it is helpful. Otherwise a damaged neutral with a bad or no system ground would cause the voltage to become imbalanced and burn up sensitive electronics.

3. The NEC covers several topics about correct use of the neutral and the system ground. But for basic code regulation all new homes and panel upgrades require a 4 wire system ground.

Some things like lightbulbs assume that neutral is safe to touch, and old equipment only switches the live.

In the UK apparently there is a trend for construction equipment to be floated either side of ground, so there are two 55V lines rather than live/neutral. That is safer, with less voltage to ground.