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A theoretical investigation of the impurity photovoltaic (IPV) effect for improving silicon solar‐cell efficiency is presented. The approach is better than previous analyses because of the improved treatment of generation and recombination via impurities, and because it includes the effects of optical competition and light trapping. The approach is applied to the nonmidgap, deep‐level impurity indium as the IPV effect impurity incorporated into an idealized silicon solar cell. The analysis is based on experimentally determined parameters for indium. Improvements of cell current, subgap spectral response, and energy conversion efficiency are quantified. The analysis reveals the importance of light trapping and proper selection of indium and dopant concentrations. The impurity photovoltaic effect is predicted to improve solar‐cell efficiency.