I was having a discussion with one of the inspectors on the size of a Neutral for a 200Amp service. My comments was that a 200Amp single phase 3 wire service only needs a minimum of (2) 2/0 for the ungrounded and one #4 for the grounded conductor. But the inspector argued that all three conductors have to be 2/0. we agreed that the grounded conductor of a multiwire branch circuit will carry the unbalanced load only but he would not agree that a residential service is basically a multiwire system and the grounded conductor will carry the unbalanced load only. In a 200A service the maximum current that the grounded conductor will ever see is 100Amps.
In a practical sense the greatest amount of neutral current might be 100a but the theoretical max is 200a. You get your guidance from 250.24(C)(1)
(1) Routing and Sizing. This conductor shall be routed with the phase conductors and shall not be smaller than the required grounding electrode conductor specified in Table 250.66 but shall not be required to be larger than the largest ungrounded service-entrance phase conductor. In addition, for service-entrance phase conductors larger than 1100 kcmil copper or 1750 kcmil aluminum, the grounded conductor shall not be smaller than 121/2 percent of the area of the largest service-entrance phase conductor. The grounded conductor of a 3-phase, 3-wire delta service shall have an ampacity not less than that of the ungrounded conductors.
I think you confused 'grounded' with 'grounding' conductor.
While there are circumstances were we can reduce the size of the neutral, a service isn't usually one of them. You would have to be able to show that the bulk of the load was from 240v circuits, and size the neutral to serve ALL of the 120v. loads.
Niko, I believe that you are correct. If one does a load calculation for a typical residential service, even for a large house, the maximum 120-volt loads are very likely well below 100 amps. Then if you assume that all those loads are on one phase, which would never happen, a #4 copper would certainly be plenty large.
However, when one tries to do something that is out of the ordinary or unusual the typical reaction from other tradesmen or inspectors is at least surprise or disbelief. I do agree with you that the neutral can be sized to the maximum unbalanced load if it meets the other requirement for minmum size of ground.
Be prepared to show your service calculation if you want to win that arguement with an inspector. A more common size for a neutral in a residence is two sizes smaller than the phase conductors. This provides plenty of capacity for future circuits and avoids wasting your time arguing. I suppose the bottom line is the value of your time to do the load calculation and discuss this with an inspector versus the amount you save in wire costs. If the cable length is significant, then it might be worth your while to have the discussion in advance with the inspector. Good luck.
I thought about this a little last night and worst case would be if an installer was thinking about heat in AFCI breakers and he got creative in his shiny new (2008 compliant) 60 slot panel. So he wouldn't put two next to each other, skipping every other space. I would hope someone would catch that but who knows? If you did want to follow that strategy, checkerboard them. The ones on the odd side, one space off of the ones on the even side. That would give you plenty of breathing room and still balance the load.
BTW I couldn't get NFPA to admit there was a heat problem with a panel full of AFCIs so that may not even be an issue. I guess they never saw a panel in an un-air conditioned garage