The Smart Transformer (ST) offers ancillary services in the low voltage grids. These new services in a real distribution grid can be demonstrated by means of simulation software, but it is difficult to prove them in lab due to the complexity and heterogeneity of the distribution grids. The Power-Hardware-In-Loop (PHIL) evaluation is an interesting solution for emulating the interaction between the real grid, simulated in a Real Time Digital Simulator (RTDS), and the ST. However the PHIL evaluation requires careful analysis. Depending on the interface topology the stability and the accuracy of the loop can be affected. This is mostly true when the interface converter is not a linear power amplifier, but just a simple DC/AC switching converter. Actually, no considerations have been made in the literature about the accuracy and stability of the PHIL in case of non-linear interface converter. This paper focuses on evaluating the harmonic behavior of the PHIL in case of current harmonic content in the grid. Depending on the bandwidth of the interface converter, the accuracy of the PHIL in simulating harmonic currents can be affected. The analytical considerations on the accuracy of the loop have been verified experimentally in a complex LV grid.