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Corrected: just noticed a drawings, there is only one diode, off-set about 230 x 0.7 / 3 x 1.414 = 38 V
Can you please explain it?
Yes, sure. You are using two diodes to rectify AC voltage coming from transformer. Because a diode is not conducting current till voltage reach 0.7 V (it's like a barrier) arduino would read "0" till voltage of the secondary winding of transformer reach 0.7 V.
Now, let calculate what is the AC voltage at the primary winding when secondary 0.7 V. All you have to do is multiply by transformer ratio: 230 / 3,
and divide by sqrt(2) to correct difference RMS and amplitude value.
Off-set tells you, that arduino would read "0" till voltage reach 38 V in the outlet, and after that readings would be lower by 38V than "real" voltage so you will have to adjust your results accordingly.