Partial shading of photovoltaic (PV) system is commonly observed in the outdoor field conditions. The nonuniform illumination causes mismatch in the electrical output between the cells, which results in a nonuniform temperature distribution that can have an instantaneous effect on power and long term effect on reliability. The objective of present work is to study the temperature distribution in a partially shaded PV module under the inactive and active state of bypass diode. In this work, an electro-thermal PSPICE model has been developed to estimate temperature distribution in a shaded PV module. The temperature distribution in shaded module is analyzed in terms of number of shaded cells and their shaded area. An experimental setup has been designed to validate the developed model. To analyze the impact of different shading conditions in outdoor, thermal shade impact factor has been derived in the present study. The thermal shade impact factor can be used to estimate temperature gradient and its distribution in a shaded PV module, when the state of bypass diode changes from inactive to active. The results show that shading conditions that have thermal shade impact factor less than -1 will result in amplification of temperature gradient, when the state of bypass diode changes from inactive to active. This will lead to a manifold increase in the temperature of shaded cell. On the other hand, shading conditions which have thermal shade impact factor greater than -1 exhibit higher temperature gradient when bypass diode is inactive.