Photovoltaics/thermal radiative cooling (PVT-RC) system generates both electricity and thermal energy from solar radiation. However, the performance of PV panels can be limited by high operating temperatures, leading to reduced power output and decreased efficiency. To address this issue for hot and arid climates, a closed-loop hydronic cooling system is proposed to enhance the performance of PV systems. The system consists of a PV collector mounted on the cooling panel of a closed-loop hydronic system, which includes a water tank as a thermal buffer for diurnal heat/cold storage. This study focuses on analysing the design of the closed-loop hydronic cooling system, encompassing the heat transfer fluid, tubing, and evaluating the system's performance by investigating the effects of various parameters on its design and operation. The study analysed various parameters, such as the size of water storage tank and different tank shapes of the same capacity. A 3D CFD simulation was employed to assess the effects of these parameters, aiming to determine the optimal system design and operation. The primary design parameter of the proposed system is the total water amount, with larger tank capacities proving beneficial. Modifying the shape of the storage tank further enhances photovoltaic efficiency. According to the comprehensive evaluation, the suggested system is appropriate for dry and hot regions with significant diurnal temperature variations. This study found that eliminating the PE cover and insulation from PVT-RC modules can substantially enhance power production by up to 20% compared to conventional designs and 14% compared to PVT-RC design with PE and cover, respectively. The results of this study offer valuable insights into the design and performance of closed-loop hydronic PV cooling systems and the optimal selection of parameters to improve overall efficiency.