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Why was 120V chosen as the standard voltage of homes in the US and not some other voltage?

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The reason that 120v service was chosen, was economic. Originally electricity was delivered to homes, and most businesses, for a single purpose and that was lighting. Can openers, TVs, washers, dryers, electrical factory machinery, etc. came later. At the time the most cost effective form of light bulb was a carbon filament bulb that operated best (optimally) at 100v to 110v. This, adjusted for transmission voltage drop, set most supply lines at 120v.

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By the time cost effective, and higher voltage, metal filament bulbs were brought to the market, most of the cities in the USA were already running 120v supply lines. Europe was just starting such systems and opted for higher voltage supply lines.

Higher voltages are used for long distance transmission and power distribution because more power can be transferred over the same size wire at a higher voltage (lower current). Power generation plants often use voltages in the hundreds of thousands, 115,000 to 165,000 of volts to move power over long distances. For lines of up to 20 miles long around a city, 2400 volts works well to reduce the voltage loss in the wires.

In North America, the electrical power lines going to residential streets and roads are operated at a primary voltage of 7200 volts. This voltage (12500/1.73 = 7225) is one leg from a three phase 12500 volt primary line. On the secondary of the transformers it is center tapped to provide 120 volts from each 240-volt leg to the center point. The center point is electrically neutral. The actual measured voltage in your house receptacle circuits will normally be 110 to 120 volts. All appliances are rated for the minimum operating voltage (110-115). This is the cause of confusion about the actual level of the supply voltages.

Different nominal voltage level and frequency standards are used in different countries. Europeans - and many other countries around the world - use 50 Hz (cycles per second) as the alternating frequency, not 60Hz as is used in North America and, again, many other countries around the world. The reason to use a higher voltage is that it is more economical because the current is less, so the wires can be smaller. On the other hand, the reason to use lower voltage in homes is safety: the lower the voltage, the safer it is.

If you have 10 amps drawing on one leg of your 240/120 service, and 10 amps on the other leg, the I2R losses are one fourth what they would be if you had 20 amps on just the one leg.

The Europeans use 415/240 (415/1.73 = 240), so their I2R losses are 1/16th of our 120 volt losses, with 20 amps drawing on just one leg.

480 V center tapped (split phase) is used in the UK only rarely, typically in rural areas to supply an isolated small group of houses that can be fed off a single phase overhead spur. Most houses and small businesses are supplied with 240 V single phase taken from a 415 V three phase local system, fed from a transformer of up to 700 KVA connected to the 11 kV distribution system. The voltage is mostly 240 V but is nominally described as 230 V with a suitably wide tolerance, to comply with European standards.

Originally, the service voltage was about 90 volts direct current, which was Edison's plan. Tesla proposed that the electrical grid be alternating current (AC) and competed with Edison for the first generating plant to be built in the State of New York at Niagara Falls. Edison proposed a DC system and Tesla an AC system. History tells us that Tesla won the competition, and because of that the industrial revolution was quickly accelerated. Had Edison won we would probably still be in the dark ages because of the inefficiency of transmitting DC current over long distances. While Edison was promoting the electrical light bulb around the country, almost every town required its own generating station because DC would lose so much in the transmission that it became unusable after only a couple of miles.

Tesla also had invented the poly phase alternating current generators that provided for the ability to generate the voltages necessary for long distance transmission. Tesla kept the voltage about the same as what Edison started but raised it to the 110 volts alternating current (VAC) because of the higher related voltages of 220 VAC and 440 VAC, which were integral to the more efficient poly phase generators.

The standard voltage available in most parts of the country (US) is now nominally 120 VAC volts +/- 10%, and can vary from 108 VAC to 132 VAC. It's usually around 117-118 VAC.

Transmission distances, the actual power needed in a neighborhood, cost, efficiency and safety issues dictate service parameters. Common distribution voltages run up to 16,000 volts. 12,000 is very common but there is still a lot of activity adding on to legacy distribution grids at lower voltages. A 2400 volt primary is very low for a distribution transformer.

In actuality power transmission is over many miles and the transmission voltage is more then 110kV. In fact interstate transmission is in the range of close to 500kV. At a substation it is reduced to 16kV for local area distribution. Transmission for the whole of the grid in North America is all tied together . Why? For economy and reliability. For example in the Summer some states do not use air conditioning but in Las Vegas, Nevada they do, so they actually buy the power from Canada in the summer because it is cost effective and reduces the need for more generation plants. Even then reserve spin power must be sustained for peak demands. Because power plants cannot produce near instant acceleration to meet new demands. In many cities and other peak demand areas, specialist peakers work to ensure that the the integrity of the grid is always maintained. 240 v is standard for the USA but only one phase is used and the transformer center tap is grounded, making it safer. Also, the main frequency of 60 Hz produced by power generation is not as stable as some people think. It varies throughout the day as loading changes but the controllers must legally ensure that it averages 60Hz over a complete day so that electric clocks using synchronous motors remain accurate.
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