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Energy and water poverty are two main challenges of the modern world. Most developing and underdeveloped countries need more efficient electricity-producing sources to overcome the problem of potable water evaporation. At the same time, the traditional way to produce energy/electricity is also responsible for polluting the environment and damaging the ecosystem. Notably, many techniques have been used around the globe, such as a photovoltaic (PV) cooling (active, passive, and combined) process to reduce the working temperature of the PV panels (up to 60 °C) to improve the system efficiency. For floating photovoltaic (FPV), water cooling is mainly responsible for reducing the panel temperature to enhance the production capacity of the PV panels, while the system efficiency can increase up to around 30%. At the same time, due to the water surface covering, the water loss due to evaporation is also minimized, and the water evaporation could be minimized by up to 60% depending on the total area covered by the water surfaces. Therefore, it could be the right choice for generating clean and green energy, with dual positive effects. The first is to improve the efficiency of the PV panels to harness more energy and minimize water evaporation. This review article focuses mainly on various PV and FPV cooling methods and the use and advantages of FPV plants, particularly covering efficiency augmentation and reduction of water evaporation due to the installation of PV systems on the water bodies. [ABSTRACT FROM AUTHOR]