Demand Response (DR) plays a vital role in a smart grid, helping consumers plan their usage patterns and optimize electricity consumption and also reduce harmonic pollution in a distribution grid without compromising on their needs. The first step of DR is the disaggregation of loads and identifying them individually. The literature suggests that this is accomplished through electric features. Present-day households are using modern power electronic-based nonlinear loads such as LED (Light Emitting Diode) lamps, electronic regulators and digital controllers to reduce the electricity consumption. Furthermore, usage of SMPS (Switched-Mode Power Supply) for computing and mobile phone chargers is increasing in every home. These nonlinear loads, while reducing electricity consumption, also introduce harmonic pollution into the distribution grid. This article presents a deterministic approach to the non-intrusive identification of load patterns using percentage Total Harmonic Distortion (THD) for DR management from a Power Quality perspective. The percentage THD of various combinations of loads is estimated by enhanced dual-spectrum line interpolated FFT (Fast Fourier Transform) with a four-term minimal side-lobe window using a LabVIEW-based hardware setup in real time. The results demonstrate that percentage THD identifies a different combination of loads effectively and advocates alternate load combinations for recommending to the consumer to reduce harmonic pollution in the distribution grid.