Single rare-earth ions in solids show great potential for quantum applications, including single photon emission, quantum computing, and high-precision sensing. However, homogeneous linewidths observed for single rare-earth ions are orders of magnitude larger than the sub-kilohertz linewidths observed for ensembles in bulk crystals. The spectral broadening creates a significant challenge for achieving entanglement generation and qubit operation with single rare-earth ions, so it is critical to investigate the broadening mechanisms. We report a spectral broadening study on a single Er$^{3+}$ ion in a Si nano-transistor. The Er-induced photoionisation rate is found to be an appropriate quantity to represent the optical transition probability for spectroscopic studies, and the single ion spectra display a Lorentzian lineshape at all optical powers in use. Spectral broadening is observed at relatively high optical powers and is caused by spectral diffusion on a fast time scale.