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In the context of transformer grounding, grounding must involve a grounding rod outside to ensure safety and compliance with electrical codes. This practice is essential for providing a low-resistance path to ground, which helps prevent voltage buildup and mitigates the risk of electrical shock or fire hazards. Proper grounding also protects equipment by allowing fault currents to safely dissipate into the earth, preventing damage to the electrical system.

Using a grounding rod outside serves as a more effective solution than just grounding inside, as it provides a direct connection to the ground, reducing transient voltages and improving the overall safety of the electrical system. Other grounding methods, such as ground plates, may be used in specific situations, but the grounding rod is a foundational method required for most installations to adhere to safety standards and regulations. Grounding being optional or only requiring internal measures does not meet the necessary safety criteria outlined in electrical codes.