Okay, let's break down your situation. You want to tap a 208V single-phase, 40A receptacle (2 hots and a ground) to power a small 120/240V subpanel feeding three 120V circuits. Here's how to address the challenges

The Key Challenge: Creating 120V from a 208V Single-Phase System
You are correct: You cannot reliably and safely create a 120V circuit without a neutral reference in this setup. While you have two "hots" (208V between them), neither of them is inherently a neutral (0V) in relation to ground. Trying to simply use one of them as a neutral would be very dangerous and almost certainly damage your 120V devices and potentially cause a fire.

Why No Neutral from the Receptacle?

The 208V single-phase configuration you describe (2 hots + ground) is specifically designed to deliver 208V between the two hot conductors. The voltage between either hot and ground (or what would typically be neutral) will be around 120V, but that ground connection is not intended to carry neutral return current.

The Correct (and Code-Compliant) Solutions

You have a few options. Note that you must comply with all applicable electrical codes. If you are unsure, hire a qualified electrician. The following is for informational purposes only and is not a substitute for professional advice.1. Autotransformer

This is likely the safest and best technical solution, although it might be more expensive. An autotransformer will take the 208V input and derive a proper 120/240V output, including a neutral. You would connect the 208V hots and ground to the autotransformer input. The autotransformer would then provide you with two 120V hots, a neutral, and a ground on the output.

Sizing

Choose an autotransformer with sufficient capacity (VA or kVA) to handle the total load of your three 120V circuits. If each circuit is pulling 7 amps at 120V, that's 7A 120V 3 circuits = 2520 VA. Get an autotransformer rated for at least 3 kVA (3000 VA) to provide some headroom.

Wiring

208V hots to the autotransformer input (marked appropriately). Ground to the autotransformer ground terminal. From the autotransformer output: Two 120V hots to the subpanel's main breaker. Neutral to the subpanel's neutral bus. Ground to the subpanel's ground bus.2.

Step-Down Transformer with a Dedicated Secondary Winding

This involves using a transformer that's specifically designed for the 208V to 120/240V conversion. Unlike an autotransformer, a standard step-down transformer provides isolation between the primary (208V) and secondary (120/240V) windings. The secondary winding will have a center tap, and that center tap will be connected to ground to create the neutral for your 120V circuits.

Sizing: As with the autotransformer, size this transformer to handle the total load of your circuits, plus some margin. A 3 kVA transformer should be adequate for your 2520 VA load.

Wiring the Subpanel (After Obtaining 120/240V with Neutral)

Once you have 120/240V with a neutral properly derived by one of the methods above, wiring the subpanel is standard: Main Breaker

Connect the two 120V hots to the lugs of the subpanel's main breaker (if it has one; if not, connect directly to the breaker bus bars).

Neutral Bus

Connect the neutral wire to the neutral bus bar.

The neutral bus bar MUST be isolated from the subpanel enclosure in a subpanel unless it's the main service panel. Ground Bus

Connect the ground wire to the ground bus bar. The ground bus bar will be bonded to the subpanel enclosure.

120V Circuits

For each of your 120V circuits: Connect the hot wire to a single-pole breaker. Connect the neutral wire to the neutral bus. Connect the ground wire to the ground bus.

Important Safety Notes



Grounding is Critical

Ensure proper grounding throughout the entire system. This includes grounding the transformer (if used), the subpanel enclosure, and all circuits.

Overcurrent Protection

Use appropriately sized breakers for all circuits. A 15-amp breaker is generally used for 14-gauge wire, and a 20-amp breaker for 12-gauge wire.

Licensed Electrician

I strongly recommend consulting with and/or hiring a licensed electrician to perform this work. Incorrect wiring can lead to serious hazards.

Local Codes

Be aware of and comply with all local electrical codes.

In summary, you cannot safely create a 120V circuit without a properly derived neutral. Use an autotransformer or step-down transformer to generate the necessary 120/240V power with a neutral before wiring your subpanel. Seek professional help if you are not comfortable with or knowledgeable about electrical work. Flag for review