Abstract: Smart grids comprises of PV cell array, wind mills and power generators. Due to the nature of renewable sources such as sun and wind the output of such generators cannot be completely relied on. Furthermore, the fluctuating output sources results in total harmonic distortion in smart grid. Harmonics induce in the smart grid at different levels such as at transmission and distribution system and at load side. The harmonics in the grid eliminated with harmonic filters. In this paper, a harmonic filter design and connect at load side to analyse power quality. The smart grid, transmission & distribution system, harmonic filter and load design in simulink and the effect of harmonic filters are analysed.