#1 is it normal to have a 100A-breakered panel downline of 60A overcurrent protection? Totally legal. But I'd use a 225A panel. One thing many of us here agree on is running out of panel spaces is bad, and panel spaces are cheap. Both better and cheaper to get a 42-space panel today and only ever use 18 spaces, then get a 12-space panel today have to retrofit a 20-space panel tomorrow and a 30-space panel later still when you add an electric car -- that's just dumb. The big panels we prefer come with big 150-225A breakers, and they often come with "bonus breakers" and ground bars included, so the extra cost can be a wash.
#2 Breakers and fuses protect wiring downstream. Without the 60A fuse, the jumper into your house (#6?) would have no overload protection at all, and if the cable became shorted, nothing would interrupt current and it would burn your house down.
#3 If you want to increase service above 60A, talk to your power company Your service capacity will be limited by the lowest of
- what the power company is willing to provide
- the ampacity of your service conductors (frop top of service-drop pole to shutoff switch, which size using the service-conductor rules).
- the ampacity of your feeder from shutoff switch to main panel (using feeder sizing rules).
- the max ampacity of your meter pan
- the max ampacity of your shutoff switch.
It's possible to get combination meter pans/main breakers, with the main breaker serving as the shutoff switch and replacing the fuses. The main breaker and the feeder rules decides the wire size downstream of that breaker.
As far as where is the main grounding point located, some sticklers say the grounding point must be the outside fusing/shutoff switch. However that is awkward in your situation, and for ground-siting purposes I am very comfortable disregarding the outside shutoff and putting the grounding hub in the main panel. They're built for that, and shutoff switches are not.
This presumes there is one main panel. If you fork lines to two panels off that outdoor switch/breaker, things get really complicated.
The issue with 3/4 wires isn't about ampacity. It's about grounding electrode systems and
Where's your main panel?
Electrical service is 3-wire from the pole to the main panel, and it operates under service rules. After the main panel, power must be carried 4-wire and it operates under the feeder rules.
Right now it's arguable (and possibly grandfathered) that the disconnect and your run from garage to house is all part of the service. To follow this logic through, the house has the one main panel and thus the one official neutral-ground bond. The cable run benefits from the 310.16b7 uprate, meaning the wire only needs to be rated for 83% of ampacity, or 83A not 100A.
If you add the garage panel as you mean to, with both disconnects right next to each other, the house run can no longer be a service. It moves the "main panel" point to the garage. Now the house panel is a subpanel. It will need separation of neutral and ground in the panel and all the way back to the garage. The connection is feeder not service, and ground must be present. That means the permissive 83% uprate goes away and the wire must be rated for full 100A, so it may be now too small.
The upside is that ground can be retrofitted separately, it doesn't require total replacement of the cable. Ground does not need to be bundled with the conductors because it does not flow current except in emergencies. It can follow any practical route.
Best Answer
That looks like where a main breaker goes, and the stuff in there looks like the damaged guts of a main breaker. I supremely doubt this is for the outside lights.
This an extreme hazard being just like it is. I strongly recommend you get an electrician out to fix it before it burns someone's hand. What's more, it appears that something that is supposed to be breaker-protected, isn't. So the protection is gone, opening the possibility of a fire.