Abstract The plasmonic photovoltaic effect of mediation by surface plasmons in the harvesting of solar light energy in metallically surface-nanomodified photodiodes or solar cells is described in the microscopic manner. The experimentally observed increase in the efficiency of the photo-effect due to plasmons is explained by the competition between two opposing effects: that of the field concentration in plasmon oscillations and that of the admittance of indirect inter-band transitions in a semiconductor substrate induced by dipole coupling to plasmons at the nanoscale without translational invariance. The former effect favors larger metallic nanocomponents, whereas the latter effect prefers smaller nanocomponents. Both factors are quantitatively addressed within the quantum Fermi golden rule scheme, which allows for the size analysis of the plasmon effect and for its optimization. Experimental verification of the theoretical predictions is presented, including the demonstration of the proximity and size effect in double-layer photo-active substrate. The experiment reveals that the plasmon effect is still present if metallic nanoparticles are separated from substrate by the distance of order of 1 μm.