The primary objective of this study is to develop a small aquavoltaic system and evaluate key parameters, including dissolved oxygen (DO), pH, water temperature and dead zones in an open raceway pond to improve the conditions for the production of microalgae while generating electricity. The key variable parameters examined were the rotation speed of a paddle wheel at 10, 20 and 30 rpm, water depth at 15, 25 and 35 cm and response time at 0.5, 1 and 1.5 h were evaluated during May 9–15, 2023. Response Surface Methodology (RSM) and Central Composite Design (CCD) were used to optimize these parameters for acheiving DO levels suitable for microalgae production. The findings showed that increasing the rotation speed of a paddlewheel at the appropriate water depth significantly influences the flow rate, thereby controling DO levels. A maximum DO value of 6.94 mg/l was achieved after 1 h at a water depth of 25 cm and the paddle wheel rotation speed of 20 rpm. Increasing the rotation speed from 10 to 30 rpm resulted in DO values within the optimal range of 6–7 mg/l, reducing dead zones from 21.05 % to 9.16 %. However, with a paddle wheel spinning at 10 rpm, DO decreased below 5 mg/l with increasing water depth and minimal shading, with pH reaching a minimum of 6.8 ppm. Addiotionally, the experiments revealed no significant difference in efficiency between modules installed in open ponds and those installed on the ground over short time periods. The economic analysis indicated that spirulina production costs are 7 % higher with the non-aquavoltaic system due to non-solar electricity use. Furtehrmore, the cost of spirulina produced with the aquavoltaic system was 0.4975 USD/g at a 5 % interest rate and 0.331 USD/g at a 10 % interest rate in the fifth year. The current study underlines that aquavoltaics could have the potential to further increase the production of microalgae and thus reduce production costs. This opens up opportunities for long-term research leading to further optimization between energy production and environmental sustainability in aquaculture systems.