Photovoltaic (PV) panels, depending on the PV cell technology used, convert only a small amount of incident energy into electricity (about 5–25% for commercial systems), and the rest is converted into heat. The produced heat is partly transferred back to the environment while the remaining part causes the enhancement of the PV panel temperature itself. This increase in the PV panel temperature further affects power production adversely, if the PV panel temperature rises above the standard operating temperature (usually 25 °C). The present study deals with the thermal analysis of PV panel involving (i) numerical study based on finite element heat transfer, (ii) the outdoor experimental validation of the thermal model developed. The thermal model is based on the energy balance of the PV module in which all essential heat transfer mechanisms between the module to the environment and related power output are modeled to observe the net change in PV module temperature. The results clearly demonstrate the need and ability of the model to realistically simulate the thermal behavior of PV panels. Additionally, using the same model, numerical simulations have been also carried out for two different cities, namely Allahabad and Jodhpur, for Indian climate, to predict the hourly average module temperature of PV panels for different months. The results show that normal module temperature is raised much above the standard test conditions for the months of April, May and June.