I noticed while changing several switches in my house that some of the ground wires in the junction boxes are left quite long (12-18 inches) with their ends coiled up. The black and white wires are all cut to 6 inches or so. Why is this? Do I need to do this if I add an outlet in my unfinished basement?
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NO!.....Ground your outlets, most light circuts are not grounded thats why the ground wire is just coiled up in the box.
Ok here is the correct answer. The ground wires in the switch boxes were most likely just coiled up because switches did not have ground terminals on them. They do now so you must connect the ground wires to the switch ground terminal. And when you add an outlet you must ground it as well.
You do not need to coil your wires. They probably did so to increase the chance that a short would hit the ground wire and return through the ground wire instead of electrifying the switch. As others said, you should just attach the ground wire to both the box (if it is metal) AND to the switch, itself. In short, the ground wires need not be coiled up, they can be trimmed to fit just like the other wires, and should be attached to the outlets or switches in the box just like the "other" wires.
