The surging demand for air conditioning, especially in hot climates, underscores the urgency of strategies aimed at curbing fossil fuel reliance and fostering energy saving strategy. Despite the longstanding utility and advantages of the conventional mechanical vapor compression refrigeration system, sustainability hurdles persist owing to its pronounced electricity demand. While evaporative cooling, harnessing water evaporation, emerges as a more efficient alternative, its efficacy is contingent upon environmental conditions. Addressing this, dew-point evaporative cooling (DPEC) presents an innovative direction, showcasing superior efficiency by directing supply air into a wet channel. This study delves into the thermodynamic losses within a counter-flow configured DPEC system, employing a transient entropy generation model rooted in the second law of thermodynamics to provide a comprehensive analysis of DPEC’s performance. Key findings that emerged from this study reveal that (1) the transient entropy generation is intricately distributed across different layers of the dew point evaporative cooling (DPEC) system, including dry air, wet air, the channel plate, and the water film; (2) Parametric analyses highlight the significant impact of factors on entropy generation, inlet air temperature has a minimal effect on system efficiency, but higher temperatures increase thermal losses. Excessive humidity limits evaporative potential, while low humidity significantly increases entropy generation. The system performs optimally at a working ratio of 0.3 and lower air velocities (within the inlet air velocity range of 0.6 to 2.2 m/s). Channel length has little impact, while the system is more sensitive to channel height, with a height of 2.5–3.5 mm being conducive to better performance. Experimental validation demonstrates the model’s accuracy in predicting system performance. The research contributes to a deeper understanding of DPEC systems, offering insights for achieving optimal operating conditions and enhancing overall efficiency in the pursuit of sustainable development.