Our company sell and install standby generators. We have a product offering that is configured with the automatic transfer switch housed within the generator enclosure. This system utilizes a line side disconnect and a load side disconnect, both mounted externally onto the generator enclosure. The question is in regards to table(s) 310.16 and/or 310.17 in choosing the right size conductor based on the potenital ampacity of the transfer switch. We recently had an install fail by the AHJ stating that the conductors were undersized. The system is 480 volt, three phase. the wire chosen was based on table 310.17, 1/0 at 260 amps whereas the AHJ said the wires needed to be 3/0 at 225 amps based on table 310.16. The compartment where the transfer switch is housed is approx. 3 1/2' x 3 1/2' x 3 1/2'. The AHJ said the conductors were "not in free air", therefore he felt they were undersized. Any comments???