In order to detect the fluctuation harmonic in grid system, Fourier and wavelet transform are integrated and applied to power harmonic analysis in this paper. A series of Band-pass filters are designed to separate fundamental and harmonic from each other by using wavelet transform, then the amplitude, frequency and phase of fundamental and harmonic are precisely calculated by Short Time Fourier Transform (STFT). The results of simulation show that this method can accurately detect the amplitude, frequency and phase of fundamental and harmonic with its order from 2 to 63, even this signal comprises Gaussian additive white noise. This improved algorithm is simple and convenient for implementation.