Ag nanoparticles were grown on glass and PEDOT:PSS by RF magnetron sputtering. Ag deposition on glass and PEDOT:PSS showed a substrate dependent nanoparticle growth morphology and a localized surface plasmon resonance (LSPR) effect in the visible region. The article reports the optical properties of Ag and Ag/PEDOT:PSS layers by theoretical simulations of UV-vis transmittance spectroscopy. The Bergman effective medium theory was used to simulate the layer of isolated and semi-continuous Ag nanoparticles hosted in an air matrix. PEDOT:PSS was simulated by using a combination of frequency dependent free charge carriers (extended Drude model) and interband transitions. The complex dielectric function, refractive index (eta) and extinction coefficient (kappa) of Ag nanoparticles and Ag modified PEDOT:PSS layers have been deduced from the simulation of the UV-vis spectra between 350 and 1500 nm. The modification in dielectric function of PEDOT:PSS by Ag enhanced the charge carrier transport. A photoactive layer (P3HT:PCBM) was spin coated on to Ag/PEDOT:PSS/ITO/glass to demonstrate the enhancement in light harvesting. The incorporation of Ag plasmons influenced both the open circuit voltage (V-oc) and short circuit current (J(sc)). The optimum nanoparticle incorporation enhanced the efficiency (PCE) from 0.54% to 1.4% ie., a 2.6 times enhancement in our simple reference device. The local field enhancement from LSPR in the visible range coincided with the absorption regime of the photoactive polymer. Our results further show that augmenting the size and density of Ag nanoparticles leads to optical losses due to poor coupling with the active layer. (C) 2015 Elsevier Ltd. All rights reserved.