One of the main factors that affects the efficiency of photovoltaic (PV) panels while generating power is their temperature throughout the day. When the cell temperature increases, the generated power and the efficiency decreases. In this study, experimental and numerical approaches are carried out to examine the effect of adding Al₂O₃ nanofluid on the performance of PV panels compared to pure water. Two modules are used in this study, the first one is uncooled PV panel, and the second module is used for both water and nanofluid cooling medium flowing through a pancake copper coil configuration. The pancake coils are attached to the back side of the PV panels. The concentration of nanofluid that is considered for the evaluation is (0.001 Al₂O₃). ANSYS software was used to simulate and determine the thermal performance of both cooling methods in order to compare with experimental results. As expected, there is an enhancement in the efficiency of the cooled module compared to the uncooled module, which helps to increase the output power. The results showed the output power for the nanofluid water-cooled panel increased by 15.6% compared to that cooled with water. The heat transfer fluid containing (0.001 Al₂O₃) improved PV panel performance by lowering PV temperature