What Is an Electrical Circuit and How Does It Work?

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A circuit connecting an LED to a battery is a microcosm of a typical residential circuit.
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Imagine powering a light-emitting diode with a D-cell battery. You connect one terminal of the battery to one of the LED terminals with copper wire, and nothing happens. However, when you connect the other pair of terminals with another length of wire, the light goes on. By making this second connection, you complete the circuit and allow electricity to flow in a complete pathway.


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The electrical circuits in your home operate by the same principle, with a few key differences. Among the most important are that the voltage in your house is higher, the power source never runs down, and the current isn't direct (DC) as it is with a battery, but alternating (AC). But whatever form of current being discussed, an electrical circuit is the wiring pathway that runs from the power source, through wires to the devices being powered, the back again to the power source. A circuit is essentially a completed loop of electrical current. Any time you turn a wall switch ON or OFF, or any time you plug in and turn on a lamp or other appliance, you are either completing, or interrupting, that circuit.

The Electrical Panel

If your house is "on the grid," your power comes from a generating station that works 24/7 to produce electricity for you and your neighbors. The power comes to your house on transmission lines and gets stepped down to 240 volts by a transformer before coming to your main electrical panel. The panel is the control center for your home's electricity, and all the circuits in the house originate and return there.

The electrical panel is the control center for all the circuits in a house.
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Just as an LED has to be connected to the positive and negative poles of a battery before it will illuminate, the circuit panel has to have two connections to the generating station before electricity will flow. The station produces AC current by the rotation of an inductive coil, and the electric signal changes direction 60 time a second, so it's meaningless to designate a positive and negative pole as you do with DC current. Instead, the wire leading out from the station to your house is the "hot" wire, and the one completing the circuit back to the generating station is the "neutral" or "return" wire.


Inside the panel, a pair of hot wires coming from the transformer connect to a pair of brass bus bars, and a single neutral wire, connected to a chrome bus bar, completes the circuit by returning back to the transformer. The voltage of each hot bus relative to the return bus is 120 volts. All the 120-volt circuits in the house, which are the ones that power lights and outlets, connect to one of the brass bus bars and to the neutral bus. In addition, they connect to a third bus which is connected to a ground rod. Grounding provides a way to safely complete the circuit in case of a power surge or some other fault. It prevents electrical accidents and fires.

Circuit Wires Are Color-Coded

The black wire is hot and the white wire is neutral.
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When you install an electric circuit, you must install a circuit breaker for that circuit. The breaker is a safety device that you can manually shut off to cut power to the circuit. It trips when a short circuit or some other fault produces a current surge. Panels are designed in such a way that the breaker snaps into place in a designated slot, and when it's in place, it's in contact with one of the brass bus bars.

The hot wire for the circuit attaches to the circuit breaker and the return wire attaches to the neutral bus. In addition, each circuit has a ground wire that connects to the ground bus. The National Electric Code specifies white as the color for the neutral wire, and by convention, the hot wire is either black or red. In 120-volt circuits, the hot wire is almost always black. The ground wire is usually bare copper, but it can be a green insulated wire.

Some appliances in a typical household run on 240-volt power. A 240-volt circuit is created by using a two-gang breaker, which contacts both bus bars at the same time. Since the voltage between each hot bus and the return wire is 120 volts, the voltage between the two hot bus bars is 240 volts.


  • Note: The 120-volt and 240-volt ratings are averages. In practice, line voltages can vary. For the purposes of this discussion, 120-volts refers to devices with ratings between 110 and 125 volts, and 240-volt devices can refer to voltage ratings ranging from 230 to 250 volts.

With a 240-volt circuit breaker, the convention is to attach a red wire to one of the terminals on the two-gang set and a black one to the other. Because these two wires constitute a complete circuit, a return isn't required unless the circuit also supplies power to a 120-volt device, such as a clock on a stove.

Working with Electricity

Always test to make sure the power is off before doing electrical work.
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Each breaker in an electrical panel controls a circuit in the house, and a number of devices may be installed on a single circuit. For example, all the outlets in the living room may be on one circuit. A lighting circuit may supply power to the light fixtures in several adjacent rooms. Electrical codes require that some appliances and fixtures be served by their own "dedicated circuits" that serve no other outlets, lights, or fixures. For example, in a kitchen, the major appliances, such as the refrigerator, microwave, dishwasher, and garbage disposer, must have their own dedicated circuits.

Renovations and other considerations can produce some puzzling configurations, such as the lights in a bedroom sharing a circuit with outdoor outlets or the washing machine outlet. To avoid confusion, it's important to index your panel by determining which devices each breaker controls and marking these on the panel door . You can do this by turning off the breaker and noting which devices lose power.


When wiring a device, it's important to first turn off the breaker controlling the circuit and to double-check using a voltage tester before touching any terminals or wires. Keep the standard color codes in mind when making connections. Hot terminals are always brass, neutral terminals are chrome or silver colored and ground terminals are green. Because the wires are color-coded, you always know which wire to attach to which terminal in order to close the circuit and power the device. It's always white wire to chrome/silver, terminal bare copper to green terminal, and black or red wire to brass terminal.



Chris Deziel is a contractor, builder and general fix-it pro who has been active in the construction trades for 40 years. He has degrees in science and humanities and years of teaching experience. An avid craftsman and musician, Deziel began writing on home improvement topics in 2010. He worked as an expert consultant with eHow Now and Pro Referral -- a Home Depot site. A DIYer by nature, Deziel regularly shares tips and tricks for a better home and garden at Hunker and Family Handyman.