According to the present status of power quality analysis, a novel time-frequency analysis method with high resolution, called time-frequency-adaptive optimal-kernel, is proposed in this paper for investigating the detection of harmonics. This method obtains time-frequency optimal-kernel function by computing ambiguity function of each point in time-frequency plane to suppress cross-term interference caused by multi-component signal under same time, so that high time-frequency resolution is obtained. The method is applied to the analysis of harmonics, and the harmonics amplitude is detected by combining with fast Fourier transform. The test results show that the method describes the frequency and amplitude characteristics of the harmonic components accurately, and harmonics are detected and identified accurately.