Electrical Panels: What They Are & How They Work (Complete Guide)

Almost everyone who lives in or owns a home has heard of an electrical panel, but very few people actually know what they do and how they work. While electrical panels can seem like complex equipment requiring specialized knowledge to understand, they operate on some simple principles that nearly anyone can grasp.

An electrical panel, sometimes called a breaker box or breaker panel, is a metal box that holds your home’s circuit breakers. Modern homes have circuits that control the power to portions of the house. When needed, circuit breakers “trip” and cut off power to a specific circuit as a safety measure.

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The topic of home electrical and breaker panels can seem very daunting to most homeowners, but it’s pretty simple if you take the time to learn the basics. Below we’ll take an in-depth look at electrical panels, how they work, the different types, how to find your breaker panel in your home, and many other common questions regarding breaker boxes.

The Basics of Electrical Panels

As a homeowner or nearly anybody living in a house, it is crucial to know about electrical panels for safety and convenience. In the case of an emergency, you should know where the breaker box in your home is so you can shut off power to affected circuits.

More commonly, your breaker will trip, and you’ll need to reset it and restore power to the circuit. Knowing the location of your home’s electrical panel and how it works will make the entire process much smoother. It’s also good to know precisely how equipment in your home works for any repair work you need.

What is an Electrical Panel?

Modern home electrical systems consist of numerous circuits that control the electricity to specific areas in the house. While a single circuit can provide power to multiple rooms, each room in a house frequently gets its own circuit, and large appliances also get dedicated circuits.

An electrical panel is a steel box that houses circuit breakers. In the case of the main breaker panel, power enters from the meter and splits off into different circuits, each with its own circuit breaker. There are many different breaker panel sizes and types, including main panels, main lug panels, sub-panels, and transfer switches, which we’ll take a more in-depth look at later.

Main panel breakers act as a safety barrier between the source wires coming from the meter and the electrical wiring in your home. When a breaker detects an electrical fault that could cause damage to your home or people, it quickly switches off power to the affected circuit. Other types of electrical panels, while often in different positions in your home’s electrical system, operate on the same principle.

The Components of an Electrical Panel

When you open up the metal door of an electrical panel, it can seem like a giant mess of wires, metal bars, and breaker switches. But each piece serves a specific purpose, and the whole system cannot work without all the components—at least not safely. Below we’ll go over the main parts that you’ll see in a typical home electrical panel:

  • Breaker Box – The breaker box is the metal enclosure that holds all the components described below. Breaker boxes typically mount on the wall and have a single door on the front. There is a large opening at the top for the source wires, and along the top, bottom, and sides are popouts for branch circuits to exit.
  • Source Wires – Source wires are the wires that come from the meter into the breaker box from the top. There are typically three source wires: two hot and one neutral wire. The two hot source wires connect to the main disconnect switch, while the source neutral wire connects to the neutral busbar.
  • Main Disconnect Switch – The two hot source wires connect to the main disconnect switch before heading to the hot busbars. It is typically located near the top of the breaker box and acts as the main breaker for the breaker panel. The entire electrical panel loses power if the main disconnect switch trips or you manually turn it off.
  • Hot Busbars – The hot busbars are (typically) two bars that run down the center of the breaker panel. The hot source wires connect to the hot busbars to supply power to the entire panel and any subsequent branch circuits. Circuit breakers run along the hot busbars.
  • Neutral Busbar – The neutral busbar connects the primary neutral source wire to all the neutral wires from branch circuits. The location of the neutral busbar can vary from breaker box to breaker box, but it typically runs parallel to the hot busbars (when combined with the grounding busbar on the main breaker) or off to the side of the enclosure.
  • Grounding Busbar – The grounding busbar is where all the grounding wires from branch circuits converge. It connects to the main grounding electrode (grounding rod). The grounding busbar’s location can vary, but it’s typically near the bottom of the breaker box or running parallel to the hot busbars (when combined with the neutral busbar on the main breaker).
  • Circuit Breakers – Circuit breakers are the switches in the breaker box that run along the hot busbars. They stand between the primary power source (the hot busbars) and the branch circuits that exit the breaker box. Each branch circuit gets a dedicated circuit breaker. There are three main types of breakers: standard (no added protection), Ground Fault Circuit Interrupter (GFCI), and Arc Fault Circuit Interrupter (AFCI).
  • Branch Circuit Wires – Branch circuit wires are the neutral, ground, and hot wires that exit the breaker box to form circuits in your home. Typically, 120V circuits consist of three wires: hot (black), neutral (white), and ground (bare copper or green). 240V circuits can consist of three or four wires: hot L1 (black), hot L2 (red), neutral (white—sometimes absent), and ground (bare copper or green). Complex circuits or daisy-chaining can complicate things and add more wires to a circuit.

How Do Electrical Panels Work?

Electrical panels can appear extremely complicated, but they are pretty simple once you understand how electrical systems work. Your home’s electrical system is composed of circuits where electrical current flows out, powers appliances and outlets, and then flows back to complete the circuit.

Main electrical panels receive power from the main source wires run by the electrical utility. High voltage current reaches your home through the utility’s wires, goes through a transformer to step down the voltage, goes through the electric meter, and then enters your home. In the case of a sub-panel, it works on the same principle but receives power from the main electrical panel instead of source wires.

Current then runs from the hot source wires to the main disconnect switch. The main disconnect switch is the large breaker at the top of the breaker box that acts as the shut-off for the entire panel. Power then reaches the two hot busbars running down the center of the electrical panel.

Power goes from the hot busbars to the hot wires in the power branch circuits that exit from the sides of the electrical panel. Circuit breakers positioned along the hot busbars act as shut-off switches for each branch circuit. While you can manually switch circuit breakers to cut power, they automatically trip when they detect a power surge or too much current going into the circuit.

Branch circuits can power various things in a home, including appliances, outlets, and lights. The current then goes back to the electrical panel to complete the circuit. Power typically returns through the neutral wires, at least in an unbalanced system. Neutral wires connect to the neutral busbar (or the neutral/ground busbar in a main electrical panel).

Electrical panels are the hubs for your home’s electrical system. Power enters the breaker panel from the utility, splits off into circuits to power your home, and then returns to complete the circuit. The main disconnect switch and individual circuit breakers help keep the system safe and give you control over the electricity in your home.

Different Types of Electrical Panels

Now that you know the basics of how electrical panels operate to control the electricity in your home, it’s essential to look at the different types of panels that you might encounter. In general, there are four types of electrical panels:

  • Main breaker panel
  • Main lug panel
  • Sub-panels
  • Transfer switches

Typically, a single house does not have every electrical panel type; it would be rare to see them all in the same building. 

Main Breaker Panel

The main breaker panel is the primary electrical service panel in most homes. It’s where electricity enters your house from the meter and splits off into branch circuits to power everything in your home. 

Main breaker panels, as described above, have hot source wires from the utility that typically enter from the top. The main disconnect switch near the top of the breaker box controls power to the entire panel and, therefore, your house. The hot source wires then connect to the hot busbars running down the center of the enclosure.

Branch circuits connect to the hot busbars with circuit breakers located at the connecting point for safety. When the breaker detects an unexpected increase in current due to a fault, power surge, or short, it trips and cuts off power to the affected circuit.

Main breaker panels typically have a single neutral/grounding busbar instead of separate busbars for each function. All ground and neutral wires from branch circuits connect to the neutral/grounding busbar. Depending on local codes, the grounding electrode (typically a grounding rod) and the source neutral line also connect to the neutral/grounding busbar.

Main Lug Panels

Main lug panels are nearly identical to main breaker panels but do not have a main disconnect switch near the top of the breaker box. Instead, the hot source lines run directly to a lug connector.

It is common for lug panels to act as sub-panels in many residential electrical systems. The main disconnect switch for a lug panel is often at the meter (if used as the main panel) or at the main panel (if used as a sub-panel).

Like main breaker panels, main lug panels have hot busbars running down the center of the enclosure. Branch circuits split off from the hot busbars, and each has a circuit breaker to cut off power to the circuit in the case of an emergency. The natural and grounding busbars on a lug panel are typically separate bars instead of the combined neutral/grounding busbar commonly found on subpanels.

Subpanels

Subpanels are smaller electrical panels found downstream from the residence’s main breaker box. They act as a secondary electrical “hub” for large houses that need multiple circuits at a considerable distance from the main panel. Most sub-panels are lug panels and do not have a main disconnect switch directly on the panel.

The number of possible sub-panels in a house is limited to the number of circuit breaker slots in the main breaker panel. Sub-panels get power from the main breaker panel, exactly how a branch circuit gets current. 

Sub-panels work nearly identically to how the main breaker panel or lug panel functions. However, the subpanel’s source wires are a branch circuit from the main breaker box instead of coming from the electric utility’s meter. The neutral and grounding busbars in a sub-panel must be separated bars instead of the combined neutral/grounding busbar commonly found on the main electrical panel.

Transfer Switches

Transfer switches are a special type of sub-panel used when your home has an alternate power source wired directly into the home’s electrical system. Standby generators, whole house generators, and other alternate power sources often call for a transfer switch to connect to your home.

Transfer switches are often located next to your home’s main breaker panel and are an easy way to switch your home from utility power to your backup power source. There are two main types of transfer switches:

  • Manual – With a manual transfer switch, you must manually turn on your generator and move the switch to the “on” position. Manual transfer switches can save you money, but they require more manual work to switch your home’s electrical system to your backup power source.
  • Automatic – Automatic transfer switches are more sophisticated than their manual counterparts and often more expensive. With an automatic transfer switch, you don’t have to do anything when the power goes out; it automatically turns on your generator and switches your home’s electrical system to the backup power source.

Differences Between a Fuse Box and an Electrical Panel

The various electrical system control panel types can confuse the terminology and the minuscule differences between systems. Fuse boxes and electrical panels are two terms you’ll often hear, but what is the difference between them?

The way electricity flows through a fuse box and an electrical panel is nearly identical, but there is one key difference. Fuse boxes use fuses on branch circuits to cut power in an emergency, while electrical panels utilize circuit breakers.

Fuse boxes have screw-in fuses along the hot busbars. When the current exceeds the fuses’ rating because of a power surge or short, the fusing element melts and cuts off power to the circuit. Fuses are single-use, so when one burns out, you must replace it. Fuse boxes utilize older technology and are uncommon in residential buildings today. 

Electrical panels have circuit breakers along the hot busbars that trip when the current exceeds their rating due to a surge or short. Circuit breakers are reusable, so you simply turn the switch back into the “on” position to restore power to the circuit. Most modern homes have electrical panels to control their electrical systems as they are simpler to use and utilize more modern safety technology.

Electrical Panel Ratings and What They Mean

Electrical panels come in different sizes and have different ratings for the number of amps they can handle. You can typically get residential main breaker panels in four sizes:

The amperage rating for an electrical panel indicates how much current circuits and sub-panels can draw from the breaker box. It is always better to have a breaker box rated for more amps than you need over one that is too small. Generally, you should aim to continuously draw no more than 80% of your panel’s capacity.

Which size electrical panel you need depends on the expected current draw of all items in your house and your service amperage. Many residential homes run on 100 or 125 amp service from the utility, limiting the number of amps you can draw (unless you increase the service amperage).

Another consideration is the number of circuit breaker slots on the electrical panel. Even if you don’t need many slots initially, it’s always best to get a panel with more circuit breaker slots than you need to leave room for expansion. The number of spaces in a residential home breaker panel can range from 12 to 60+. The number of slots a particular size breaker panel has depends on the manufacturer, but here are some standard configurations:

Breaker Panel SizeNumber of Circuit Breaker Slots/Spaces
100 amp20
125 amp25
150 amp30
200 amp40

Single-pole 120V breakers take up a single space on the breaker panel, and double-pole 240V breakers take up two slots. Tandem breakers connect two 120V circuits to a single slot, which can be ideal if you have limited space in the panel.

How to Locate an Electrical Panel in a Home

If you need to do some electrical work or want to know more about your house, you may wonder where to find your home’s electrical panel. Locating the main electrical panel in a home is typically pretty straightforward.

  1. Check Common Locations – Electrical panels are typically indoors but can be on your house’s side. Common locations for main electrical panels include the basement, utility room, laundry room, and closets. It’s typically on the first floor in houses with multiple levels.
  1. Look for a Small Access Door – Breaker boxes are typically gray metal unless painted over to blend in with the decor. You should see a small access door swing open to the side when installed in a finished wall.
  1. Check Your Home’s Paperwork – Another option is to check your home’s blueprints or home inspection report to find the electrical panel. 
  1. Consult an Electrician – If all else fails, you can always contact an electrician to help you find your home’s electrical panel. You should be able to find it if you know what you’re looking for and use the information above, but consulting an electrician is always an option.

How Long Do Electrical Panels Last?

You need to replace most modern electrical panels every 25 to 40 years. As equipment ages, it accumulates small amounts of rust and begins to break down, so it’s best to replace your electrical panel proactively at the designated intervals. If your home still has a fuse box instead of an electrical panel, it’s best to replace it with a modern breaker box.

If you notice scorch marks, a burning smell, water damage, or rust in your breaker box, immediately turn off the power and call an electrician. These signs could indicate more severe issues or the need to replace your electrical panel sooner, so it’s best to address them promptly.

Final Thoughts

Electrical panels can seem like a very daunting piece of electrical equipment, but it’s pretty straightforward once you take a closer look. Hot source wires enter the electrical panel at the top, there’s a main disconnect switch, and then they connect to the hot busbars going down the center of the breaker box. There is also a neutral busbar and a grounding busbar for neutral and grounding wires, respectively.

Along the hot busbars are circuit breakers that control the power to the branch circuits that leave the electrical panel. The branch circuits provide current to items in your home that need it, including appliances, outlets, lights, or sub-panels.

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Hubert Miles

I've been conducting home inspections for 17 years. I'm a licensed Home Inspector, Certified Master Inspector (CMI), and FHA 203k Consultant. I started HomeInspectionInsider.com to help people better understand the home inspection process and answer questions about homeownership and home maintenance.
DISCLAIMER: The content published on HomeInspectionInsider.com is not professional advice. You should consult with a licensed professional and check local permit requirements before starting any project.
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