The phenomenon of 'Hot-spotting' within photovoltaic (PV) panels, where a mismatched cell/cells heats up, leads to reliability and efficiency issues. In this paper, a novel maximum power point tracking (MPPT) algorithm is developed to compensate for hot-spotted PV module effects, thus increasing the output power and improving reliability. The MPPT algorithm implements two mitigation processes; the first to identify the optimum power-voltage (P-V) curve to track the global maximum power point (GMPP). The second process is to manipulate the output power towards the GMPP through the control of the perturbation step size. In order to verify the appropriateness of the proposed algorithm, multiple hot-spotted PV modules were tested under various environmental conditions. Significantly, the algorithm reduces the hot-spotted PV modules output power loss by at least 70% under all irradiance transition scenarios, slow, medium, and fast.