The purpose of this study is to investigate the potential of airborne particulate matter (PM10 and PM2.5) and its impact on the performance of the photovoltaic (PV) system installed in the Sargodha region, being affected by the crushing activities in the hills. More than 100 stone crushers are operating in this region. Four stations within this region are selected for taking samples during the summer and winter seasons. Glass–fiber papers are used as a collection medium for particulate matter (PM) in a high-volume sampler. The concentration of PM is found above the permissible limit at all selected sites. The chemical composition, concentration, and the formation of particulate matter (PM10 and PM2.5) layers on the surface of the photovoltaic module varies significantly depending on the site’s location and time. The accumulation of PM layers on the PV module surface is one of the operating environmental factors that cause significant reduction in PV system performance. Consequently, it leads to power loss, reduction of service life, and increase in module temperature. For the PV system’s performance analysis, two PV systems are installed at the site, having higher PM concentration. One system is cleaned regularly, while the other remains dusty. The data of both PV systems are measured and compared for 4 months (2 months for the summer season and 2 months for the winter season). It is found that when the level of suspended particulate matter (PM10 and PM2.5) increases, the energy generation of the dusty PV system (compared to the cleaned one) is reduced by 7.48% in May, 7.342% in June, 10.68% in December, and 8.03% in January. Based on the obtained results, it is recommended that the negative impact of PM on the performance of the PV system should be considered carefully during the decision-making process of setting solar energy generation targets in the regions with a high level of particulate matter.