Photovoltaic (PV) modules are typically characterized by their I–V and P–V curves at fixed temperatures and varying irradiances. The module temperature, influenced by irradiance, is essential in simulating real-world conditions for PV modules. This study focuses on utilizing PVsyst software to evaluate the performance of polycrystalline PV modules in accordance with the specific requirements of Iraq such as dust and high temperature. Through an analysis of the module’s behavior under actual conditions, it was observed that the power output of the PV module experienced a 14.1% reduction compared to the control under Standard Test Conditions (STCs) due to the temperature rise caused by increased solar irradiation. Subsequently, when solar irradiance dropped to 200 W/m2, this reduction percentage escalated to 82.3%. Moreover, the rise in temperature adversely affected the module’s efficiency, although the influence of temperature exhibited a linear reduction on efficiency. This research provides valuable insights into the performance of polycrystalline PV modules and the impact of temperature variations on their power output and efficiency, contributing to the optimization of PV systems in Iraq. The results shown by this study contribute to helping to design solar energy systems in the future, considering the losses due to temperatures, for the purpose of providing additional energy output capacity to compensate for the losses.