Grounding a subpanel

I have an existing outbuilding with an underground cable to it from my house which supplies 110v service. I wish to put a subpanel in the outbuilding and convert to 220v, but running a new cable will be very, very difficult and expensive, indeed. So, I intend to use the existing cable with the black and white wires as conductors and the ground wire as the neutral, then install a ground rod to ground the new subpanel. There are no other wires, pipes etc. going to this outbuilding. My question is this -- in the new subpanel, should the ground bus and the neutral bus be connected, or should they remain separate?

 

Actually nominal voltages are 120 and 240.Not code compliant. A bare wire can not be used as a neutral. Current code requires four wires, two hots, one neutral, one ground (EGC). Plus the panel also needs a ground rod (GEC). A GEC is required but it can not be used for the required EGC (Equipment Grounding Conductor). GEC (Grounding Electrode Conductor) is for bleeding atmospheric charges. Earth conductivity is not a reliable path to meet the purpose of the EGC, clear shorts by tripping the breaker.Exception removed from NEC circa 2008.

There is no way to safely do what you want to do with what you have. If you can not run new cable underground you can run it overhead but you will need to replace the cable you have. If you have conduit you may be able to pull new wires.

 

Also going to need two ground rods at least 6 ft. apart.
Agree 100% with Ray.
I've seen it done wrong dozens of time when someone thinks there going to save money and think they only need a light and one outlet.
The next person ends up paying.

 

"The next person ends up paying"
Another example of:
o You can install a good system now but if you want to someday upgrade to better or best, the total investment in good has to be abandoned or torn down; no part can be applied to the new system.
o You can install a better system now but if you want to someday upgrade to best, the total investment in better has to be abandoned or torn down; no part can be applied to the new system.

The 120 volt or 120/240 volt 20 or fewer amp system did not need a subpanel.

To go over 20 amps you need a subpanel for either 120 volt only or 120/240 volts (or 240 volts only) if any equipment meant for 15 or 20 amp circuits or any ordinary lights will be used.

The outbuilding needs a master disconnect for its feed, which can be a "top breaker" in a subpanel.

If the subpanel is in a different building then it also needs ground rods as if it were a main panel.

In any subpanel (panel downstream of the first whole house disconnect) ground and neutral are kept separate.

Any given building may have only one feed. When you run your newer feed with more than 20 amps or with added 240 volt capability, the old feed must be decommissioned. (The old feed could become a switch loop, powered from the downstream building, used for such purposes as being able to control lights in one building from the other building.)

The equipment grounding conductor and neutral and hots for the feed must accompany one another, in the same cable or conduit. (A rigid metal conduit may be the EGC.) You may not keep the original hot-neutral-ground underground feed in use while running just the second hot overhead.