An instrumentation scheme suitable for non-contact measurement of ac voltage of an insulated conductor is presented in this paper. The ac voltage of an insulated conductor can be measured by using a suitable probe that forms a capacitive network between the conductor and the ground. Basic idea of such a scheme employing online measurement of the capacitances and then using it for the computation of the unknown voltage has been reported earlier. We conducted a feasibility of the scheme, and found that its output suffers from effect of various parasitic parameters of the measurement circuit and the sensor. In the study, a detailed analysis of the effect of various circuit and parasitic parameters has been conducted and the same is presented in the paper. Based on the inference from the analysis, criteria for the design of the sensor electrodes and other circuit components have been accomplished and presented. The paper also discusses a simple calibration method to reduce the effect of certain parasitic parameters and hence increase the accuracy of the measurement. Moreover a FFT based processing of the measured data has been used in the presented scheme, instead of the complex methods, including analog multiplication, division, etc. employed in the earlier reported scheme. A prototype of the non-contact ac voltage measurement system has been developed and tested in the laboratory for various frequencies and voltages. Worst-case error noticed in the tests conducted was less than 0.75 %. © 2015 IEEE.