There has been much controversy over the incorporation of organic-ligand-encapsulated plasmonic nanoparticles in the active layer of bulk heterojunction organic solar cells, where both enhancement and detraction in performance have been reported. Here through comprehensive transient optical spectroscopy and electrical characterization, we demonstrate evidence of traps responsible for performance degradation in plasmonic organic solar cells fabricated with oleylamine-capped silver nanoparticles blended in the poly (3-hexylthiophene):[6,6]-phenyl-C 61-butyric acid methyl ester active layer. Despite an initial increase in exciton generation promoted by the presence of silver nanoparticles, transient absorption spectroscopy reveals no increase in the later free polaron population-attributed to fast trapping of polarons by nearby nanoparticles. The increased trap-assisted recombination is also reconfirmed by light intensity-dependent electrical measurements. These new insights into the photophysics and charge dynamics of plasmonic organic solar cells would resolve the existing controversy and provide clear guidelines for device design and fabrication.