Floating solar photovoltaic (FSPV) installations are increasing globally on lakes, reservoirs, and ponds. They offer energy production, reduce evaporation, and are viable, especially in arid and semi-arid regions. This research aimed to develop a calibrated numerical model for a water body, and then simulate a system of floating solar panels over the water body to monitor evaporation and water quality, utilising the CE-QUAL-W2 software. The King Talal reservoir, in Jordan, was chosen as the case study for this research. Several simulations were performed, at 10%, 20%, 30%, 40%, and 50% coverage. Simulation results showed that evaporation reduced with increasing coverage, but in a non-linearly proportional manner, up to 36.5% at 50% coverage. Water quality simulations focused on concentrations of dissolved oxygen [DO], phosphate [PO4], and nitrate [NO3]. Preliminary results indicate that a 40% FSPV coverage yields a [DO] increase of about 0.68 mg/L. On the other hand, a 40% and 50% FSPV coverage yield a [PO4] decrease of about 15% and 17.2%, respectively. [NO3] was least impacted by FSPV coverage. These findings suggest FSPV installations may improve water quality while reducing water loss, but the benefits do not scale linearly with coverage, highlighting the need for site-specific optimisation. The implications are significant: while FSPVs can enhance both water conservation and quality, extensive coverage may alter thermal and ecological dynamics, raising questions about optimal design for ecological balance. The trade-offs between maximising energy generation and preserving aquatic health must be carefully managed. This study informs integrated water-energy-environment strategies and supports several Sustainable Development Goals (SDG 6, 7, and 13).