Solar energy is a main source of energy that is expected to play a vital role in fulfilling the future global demand of electricity. Design of advanced photovoltaic (PV) system with high electric conversion efficiency is the key for collecting solar energy. A major obstacle hindering useful PV utilization is the deterioration of solar cell efficiency with temperature. The present results of experimentation have shown that there occurs a reduction of approximately 33% in the solar panel efficiency as the operating temperature increases from 45 °C to 68 °C at 1000 W/m2. Therefore, an innovative design of enhanced-performance solar panel using micro flat heat pipe (HP) and thermoelectric generator (TEG) is proposed and experimentally investigated in the presented project. To operate HP and TEG at highest possible efficiency, the condensation section of HP is innovatively cooled by utilize the condensed water inside the evaporator of air conditioner (which is usually between 5-7 °C). Two different types of silicon panel are used in the study: monocrystalline solar panel and polycrystalline solar panel. The results showed that a reduction in average solar panel temperature up to 25% is obtained. In addition, produced power was increased by as much as 50% when solar panel was cooled by the heat pipe. Finally, the feasibility study and cost analysis of the proposed hybrid system are discussed in details and presented.