Photovoltaic (PV) panels can increase their efficiency and durability by using water-cooled systems. In this paper, the authors present a methodology to establish the degradation rate (DR) of PV panels related to their durability and efficiency under cooled versus no-cooled conditions. A long-term feasibility analysis of PV power plants with some suggested modifications are discussed in detail. A standard system was designed to cool down the PV modules. The simulations used with this purpose are based on several publications with relevant aspects carried out in the literature using Matlab-based modeling data. Such results were then confirmed by Homer program to predict the efficiency and durability of PV panels within a lifetime period of 25 years. To illustrate the methodology proposed here, the simulation parameters were used for the city of Santa Maria-RS, Brazil. The results allowed to conclude that cooling combined with heated water for domestic usage can decrease the PV degradation rate by 3% and provide an increased efficiency by almost 30% with respect to the PV panels without such cooling approaches. Therefore, the final results conclude that installation of water-cooled PV panels is an attractive and feasible option for a short- and long-term efficiency improvement with great impact on the expansion and durability of PV power plants.