Embedding plasmonic nanoparticles (p-NPs) inside the solar cell’s active layer is capable of enhancing active layer optical absorption; however, such inclusion has some detrimental effects on the electronic properties of the solar cells. In addition, p-NPs are highly catalytic, their presence enables other non-radiative decay channels besides generation of electron–hole pairs, and the electrons usually get absorbed by these p-NPs. This results in the unfavorable fact that the potential enhancement in the carrier generation rate and the generated current is no longer in line with the enhancement in the optical absorption. In this paper, we propose to functionalize p-NPs by adding a dielectric or semiconductor shell, to passivate the p-NP without deteriorating scattering and/or plasmonic effects. Ag@SiO2 and Ag@TiO2 core–shell p-NPs have been intensely studied using extensive computational electromagnetic simulations to model the spectral response of the active layer’s optical absorption as well as electronic properties as a function of both shell composition and thickness. It is shown that a 5 nm TiO2 shell is apt to optically passivate the p-NP without any reduction in optical absorption, while improving the short circuit current density (J sc ) of the thin-film solar cell by 33.3%.