An installed photovoltaic (PV) module on a building envelope is beneficial not only for generating PV clean electricity, but also for reducing the cooling load of a building, provided that its installation is properly designed. Spacing of an air gap between the PV module and the exterior surface of the building envelope plays an important role in the PV modules’ performance and the heat gain penetration into the building, because it directly affects heat transfer from the PV module to the building envelope. PV module installations over a building envelope can be useful, especially in Thailand, where the climate is hot and humid, if it helps to minimize the heat gain penetration into the building, and at the same time, can also generate clean electricity from the PV modules. In this study, a simulation model based on one-dimensional transient heat transfer has been developed to investigate a proper air gap for a PV module installation, for fixing on a vertical wall facing southward. The accuracy of the developed model was verified with an outdoor experiment by a test rig under clear sky conditions in Bangkok, Thailand. The model’s validation showed a satisfactory result of predicted temperatures. The simulation results showed that an increase in the air gap’s spacing can improve the performance of the PV module, at the same time, it can also reduce the heat gain penetrating into the building. Although a PV module can be used as a shading device to reduce heat gain for a building envelope, it can also generate a large amount of heat gain penetration into the building envelope. This is a consequence of high thermal absorbtivity of the PV module, which results in intensively absorbing large amounts of heat within its body as it receives shortwave solar radiation from the sum and re-radiates it back to the building’s surface. Thus, a proper air gap space design is quite important for the installation. It was also found that the change of amounts of heat gain penetration into a building is much more sensitive than the change of electricity generation of the PV module performance, due to variations of the air gap. Thus, the judgment of a proper air gap spacing design should be given first priority on the reduction of the heat gain into the building. A minimum air gap of 50 mm is recommended for a single PV module, in vertical facing southward installations, for tropical climates.