Cost-effective photovoltaics (PVs) require a high energy yield with a long system lifetime. However, both are adversely affected by temperature. Here, we assess the economic impact of thermal effects on PV systems by establishing a temperature-dependent levelized cost of energy (LCOE) model. Using this model, we introduce an equivalent ratio g (with the unit of absolute efficiency %/K) as a new metric that quantitatively translates the LCOE gain obtained by reducing the module temperature (Tmod) to an equivalent absolute power conversion efficiency increase. The substantial value of g motivates us to investigate the root causes of heating in solar cells and modules, with a focus on crystalline-Si (c-Si) PVs, given its market dominance. To link the heat analysis with Tmod, we establish and validate an opto-electronically coupled thermal model to predict Tmod. This modeling approach enables the quantification of possible ways to mitigate undesired heating effects.