Increase in the surface temperature of Photovoltaic (PV) module affects its efficiency and life adversely. This relationship between efficiency and surface temperature of a PV module is defined as the temperature coefficient. Since solar parks are long-life projects, a small drop in efficiency of modules might result in a significant reduction in overall power output for large projects making this option unfeasible, for both economical and energy yield perspectives. This loss in power can be reduced by cooling of PV modules. A hybrid Photovoltaic and Thermal system (PV/T) was developed in this study to investigate the impact of this system on overall efficiency. In addition to producing electrical energy, the heat gained by the circulating fluid was utilized for domestic usage. A critical temperature of the PV module was identified in this study beyond which the drop in efficiency was higher than the temperature coefficient. This critical temperature was noted to be a function of radiation intensity and decreased with decreasing intensity. Incorporation of the cooling system resulted in a decrease in surface temperature of the module by 20% with an increase in electrical efficiency of up to 2.3%. The overall efficiency of the PV/T system of at least 70%, with a maximum overall efficiency of 85% was observed at different radiation intensities, making this system a viable alternative to the conventional PV or thermal systems being used currently.