I just got one of these for my earth relay.
http://www.ebay.com/itm/JQX-40F-1Z-40A-220VAC-Coil-PCB-Power-Relay-/120956894320?hash=item1c2997bc70
Simple enough and doesn't require extensive modification or weird changes.
1.) I agree, however the loop is only between the earth-neutral bond and the inverter so in practise it'd probably work. Still dodgy though.
Not true.
It doesn't matter where you bond an earth or neutral, it creates the bond for the entire house.
That is why any earth/neutral fault will trigger a RCD/Earth Leakage to trip.
Essentially your neutral current flows all the way to where the earth bond is created and then all the way back to the earth at the Eskom transformer.
The reason it is very dangerous:
Typically every electrical device in your house has a live and neutral wire going to it. Both conductors are evenly matched. The amount of power going in on the live matches the amount of power going back on the neutral.
So you only need to add a circuit breaker on the live and the neutral will therefore be safe.
When you create a neutral/earth bond the rules change.
You created a new path back to the Eskom transformer going VIA a single earth wire in your house.
Suddenly that earth wire can carry current of a lot of neutral conductors. You created a parallel path back to the transformer.
Why it is so dangerous and is termed a fault:
Your earth wire isn't rated to carry current
Your earth & neutral wire are suddenly carrying more current than they were rated for (
Remember you are suddenly creating a path for ALL neutral current to return)
Therefore your breaker on your live is no longer enough to ensure that the neutral will not get overloaded and certainly not the earth.
It is a fire hazard. Simple as that.
EDIT: This guy is super boring but he goes over the fault:
https://www.youtube.com/watch?v=JTkuoMplER8