I'm looking to install an AC disconnect box to the side of my house, however the clapboard siding wont allow it to sit flat. I plan to run romex through the punchout in the back and straight into the basement. How can I seal the connection? Should I run a 6" piece of pvc conduit through the outside wall and connected to the box via a nut? Example photo which I found online

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I would buy a high grade exterior caulk and caulk the box after you've screwed it in. That should prevent any water or insect intrusion.

As for the connection in the box, a standard NM clamp should do. Conduit is more or less for exposed wire and this wire would be solely inside the wall. Be sure to run conduit or UF cable from the box to whatever you're connecting to outside.

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