ground rod is hooked to the generator with copper ground cable. neutral wire is bonded with the switch in one position and unbonded in the other position so i can use it to run the house or the shop and my welder
So the generator frame is always connected to the ground rod and the 'bonding switch' lets you bond and unbond the grounded conductor at the generator as needed.
When the generator is powering the house the 'bonding switch' is open and grounded conductor/grounding conductor bonding takes place at a single point in the house panel.
When the generator is powering the welder the house wiring is not connected to the generator and the 'bonding switch' is closed so that the grounded conductor/grounding conductor bonding takes place at a single point at the generator.
Nice design, thanks for sharing!
The whole point is the grounded conductor (neutral) is required to be bonded to ground (grounding electrode system/grounding conductor) at one point and only one point.
A rule of thumb would be if the grounded conductor (neutral) of your generator is solidly connected to your house grounded conductor (neutral) then do not bond the grounded conductor (neutral) to the the grounding conductor (green or bare or generator frame) at the generator.
{there is an exception involving a transfer switch that switches the grounded conductor (neutral) but now you have to know where your house bond takes place and whether or not the generator 'sees' that bond when it is connected, some bonds take place in the main panel, some in the meter can, are you powering your main panel or just a sub-panel of critical loads; call a qualified electrician if you are not sure}
On the other hand if you are using your generator in a stand alone capacity (powering a tent city or a welder in your barn for example) then bond the grounded conductor (neutral) the the grounding conductor (green or bare or generator frame) at the generator.
