I have a 60 amp denso alternator and the AR engineering pigtail. I understand that the blue wire must be switched, but not sure what is the best place to connect the green sensor wire? Can it be connected at the output terminal on the alternator that goes to the battery? Or. does it have to have it's own connection at the 12v + battery terminal for some reason?

Well, a little research revealed the reason for connecting the sensor wire right to the battery terminal. Line loss. If you have a heavy draw on the battery the line loss of a normally sized charge wire from alternator to battery will give the wrong info to the internal regulator, since many are wired with a gauge for average charging, not heavy charging. That creates a difference in what the regulator seesUNLESS you use a very good charging line. I am using #4 welding cable, for virtually zero line loss. That allows me the ability to connect the sensor wire at the alternator charging lug.

Try this,only Denso File I Have.

When I configured my 60 amp Denso alternator, I connected the sense wire to the main lug on the starter relay.

This is the best reference I've found for Denso wiring.

Denso Wiring