Latent heat of vaporization -- it's amazing! :-)

The energy source is the remaining water, which as a liquid in an environment where the air is less than saturated (100% humidity) has excess energy. Because the "partial pressure" of the water vapor surrounding the liquid water is less than the saturation pressure, the water will evaporate, cooling it. You might say that the water has an excess of energy compared to the equilibrium state, which would be a state where no further evaporation would occur because the ambient air was saturated. Meaning: in super humid environments or in the fog (such as England much of the time), this thing won't work at all.

It probably evaporates out the top.