Reducing algae growth makes sense for canals. Would this be a desirable outcome if we were placing panels on, say, a body of water behind a dam (at a safe distance, and contained). Are there ecological impacts of reducing algae growth?

Depends on the use of the water body - as a reservoir for drinking water it would make sense [1], if you want the water for fishing not so much.

[1] https://www.sciencealert.com/here-s-what-s-really-going-on-w...

Covering one the New Zealand's hydro dams in panels would produce same amount as hydro dam itself. Floating solar is somewhat easier to install as you don't need to drive piles, you let them float on (anchoring is needed tho). Round platforms can somewhat easily rotate to track sun. You already have most of grid there and you can curtail hydro when sun is out...

Instead we burn diesel and coal to preserve water levels for peak demand (it's actually not that simple, but still sounds dramatic).