Low-temperature differential Stirling engines (LTDSE) are the gamma-type Stirling engines that can produce useful work from source temperatures less than 350 K, making them a preferred choice/device for solar energy utilization. An improved mathematical model to evaluate the performance of the solar-operated LTDSE has been developed by incorporating the top heat loss coefficient correlation with the finite-time thermodynamic model of the Stirling engine. In order to realize the internal imperfections of the thermodynamic Stirling cycle, the effect of the imperfect regeneration process is incorporated. Input parameters such as absorber plate temperature, irradiation, and geometrical features of the solar LTDSE are taken from real-time experimental data available in the literature. The effect of convective and radiation heat transfer coefficients of working fluid on maximum power output and thermal efficiency is determined to be significant and marginal, respectively. A comprehensive study of various working fluids and regenerator materials is carried out to investigate their impact on the performance of solar LTDSE. Helium is the best-working fluid, among air, hydrogen, ethane, and nitrogen for the considered model. Copper exhibited maximum regenerator effectiveness compared with Monel 400, aluminum, SS-304L.