A Hybrid Photovoltaic Thermal (PVT) system is one of the most emerging and energy-efficient technologies in the area of solar energy engineering. This review paper provides a comprehensive review of hybrid PVT systems in the context of the history of PVT, general classification, and parameter analysis. Several cell technologies with spectrum analysis are discussed to understand the application’s ability and energy efficiency. Hybrid PVT concept, characteristics, and structure analysis is also discussed in this study. An extensive analysis on the classifications of hybrid PVT systems from the recent literature is also presented here. These literatures are identified based on several criteria. In order to provide a complete and energy-efficient technology, an innovative classification of the hybrid PVT system is proposed in this paper. This proposed classification is a combination and upgrade of various existing classifications mentioned in recent research studies. Parameters have a significant and unavoidable impact on the performance and efficiency of the hybrid PVT system. A brief analysis of different parameters and the optimization of the system is conducted after reviewing recent research articles. This analysis provides insights into the impact of parameter variations on the system. A novel parameter model comprising parametric and optimistic analyses is also presented in this paper. It provides a detailed parametric description that significantly affects the performance and efficiency of the hybrid PVT system. Finally, the assessment focuses on a critical analysis of the main challenges in adopting PVT technology and suggests ways to overcome these barriers.