An experimental demonstration of the combined photovoltaic (PV) and thermoelectric conversion of concentrated sunlight (with concentration factor, X, up to ∼300) into electricity is presented. The hybrid system is based on a multi-junction PV cell and a thermoelectric generator (TEG). The latter increases the electric power of the system and dissipates some of the excessive heat. For X ≤ 200, the system's maximal efficiency, ∼32%, was mostly due to the contribution from the PV cell. With increasing X and system temperature, the PV cell's efficiency decreased while that of the TEG increased. Accordingly, the direct electrical contribution of the TEG started to dominate in the total system power, reaching ∼20% at X ≈ 290. Using a simple steady state finite element modeling, the cooling effect of the TEG on the hybrid system's efficiency was proved to be even more significant than its direct electrical contribution for high solar concentrations. As a result, the total efficiency contribution of the TEG reached ∼40% at X ≈ 200. This suggests a new system optimization concept that takes into account the PV cell's temperature dependence and the trade-off between the direct electrical generation and cooling capabilities of the TEG. It is shown that the hybrid system has a real potential to exceed 50% total efficiency by using more advanced PV cells and TE materials.