The cooling fluid is a key factor in cooling photovoltaic (PV) panels especially in the case of concentrated irradiance. Maintaining the panel at low temperature increases its efficiency. This article investigates the usage of water-Al2O3 as a nanofluid for achieving the required cooling process. The particle concentrations and sizes are investigated to record their effect on heat transfer and pressure drop in the developing and developed regions. The research was performed using ansys cfd software with two different approaches: the single phase with average properties and the discrete phase with the Eulerian–Lagrangian framework. Both approaches are compared to experimental results found in the literature. Both approaches show good agreement with the experimental results, with some advantage for the single-phase model in both processing time and predicting heat transfer in the concentration range of 1–6% by volume. It was shown that the heat transfer coefficient is greatly enhanced by increasing the particle concentration or decreasing the particle size. Conversely, the usage of nanofluid causes a severe increase in the pumping power, especially with the increase in concentration and the reduction in particle size. Thus, a system optimization was suggested to raise the overall system efficiency for photovoltaic applications.