Alternative renewable sources of energy such as solar energy, wind energy and geothermal energy are required to produce electricity in order to reduce CO2 and greenhouse gas emissions. Research in photovoltaic thermal collector systems (PVT) in hot countries has not yet made substantial progress. The opportunity to utilize the outlet PVT water temperature to be used for cooling systems such as absorption cooling systems, adsorption cooling systems and desiccant cooling systems has not been investigated in hot climatic conditions. The main objective of this study is to investigate the effect of PVT outlet water temperatures and solar cell temperature on both electrical and thermal efficiency especially in extremely hot climate conditions. The factors that affect the heat transfer rate of PVT collectors such as ambient temperature have also been discussed and the PVT outlet fluid temperature is optimized in order to reach the highest overall efficiency. Computational fluid dynamics (CFD) has been used to develop a PVT system and the results validated by experimental data from the literature. The PVT was examined for different ambient temperatures which varied from 288 K to 325 K and for different inlet temperatures which varied from 294.4 K to 385 K. Thermal efficiency of 81 % has been achieved at 325 K ambient temperature and 294.4 K inlet temperature. Average electrical efficiency is also affected by ambient and inlet temperature and was in the range of 10 % to 15 %. A maximum increase of 11.8 K in the inlet temperature has been achieved and further investigation is required to increase the outlet fluid temperature.