Go for the green wire
"I’m rewiring my Cal 2-27 and have reviewed the advice given by Don Casey in his Sailboat Maintenance Manual. He mentions grounding the green wire of an AC system to the engine’s ground terminal, but I’m not sure where to put the green wire on my engine, an outboard with an electric starter and a 6-amp alternator. Do I even need one if I install ground-fault circuit interrupter (GFCI) outlets and a galvanic isolator?"
-- Eugene Reynolds, Lacey, Washington
Don Casey replies: A boat’s DC system operates like a flashlight, with lights and appliances simply connected to the positive and negative battery terminals. However, this wiring arrangement, called a floating ground, won’t necessarily hold the circuit’s negative side at zero potential, and that could be dangerous. If there is no grounding connection, you could become the lowest resistance path to ground, and with high AC voltages this could produce a very unhappy result. The American Boat and Yacht Council (ABYC) requires a negative ground, and your boat almost certainly has one. Very often the engine/prop shaft does the job with an inboard engine, but any sizable underwater metal component can serve.
A copper path to ground will protect you, but an electrical short could pose a risk to a person in the water near the boat. Grounding the green wire ensures that this errant current won’t go into the water, but will travel back to the grounding wire ashore. Ground-fault circuit interrupter (GFCI) outlets should be part of your AC system because they protect you against a green-wire failure. A galvanic isolator is also a key supplement to the green-wire connection because it protects your boat from the corrosion potential that exists with a green-wire connection. So do not eliminate the green-wire connection; you must lead it to whatever serves as your boat’s negative ground.