The performance of PV (photovoltaic) module is strongly dependent on its operating temperature. Most of the energy absorbed by the panel is converted to heat which is normally lost and provides no value. In order to study the performance of a hybrid PV water cooled system, a numerical model (electrical and thermal) is developed using EES (Engineering Equation Solver) software. The model predicts various electrical and thermal parameters affecting its performance. The effect of cooling the module by incorporating a heat exchanger (cooling panel) at its rear surface is also investigated experimentally. The results of the numerical model are found in good agreement with the experimental measurements performed for the climate of Dhahran, Saudi Arabia. With active water cooling, the module temperature dropped significantly to about 20% leading to an increase in the PV panel efficiency by 9%. (C) 2013 Elsevier Ltd. All rights reserved.