Time-delayed collection field (TDCF), bias-assisted charge extraction (BACE), and space charge-limited current (SCLC) measurements are combined with complete numerical device simulations to unveil the effect of the solvent additive 1,8-diiodooctane (DIO) on the performance of PTB7:PCBM bulk heterojunction solar cells. DIO is shown to increase the charge generation rate, reduce geminate and bimolecular recombination, and increase the electron mobility. In total, the reduction of loss currents by processing with the additive raises the power conversion efficiency of the PTB7:PCBM blend by a factor of almost three. The lower generation rates and higher geminate recombination losses in devices without DIO are consistent with a blend morphology comprising large fullerene clusters embedded within a PTB7-rich matrix, while the low electron mobility suggests that these fullerene clusters are themselves composed of smaller pure fullerene aggregates separated by disordered areas. Our device simulations show unambiguously that the effect of the additive on the shape of the current−voltage curve (J−V) cannot be ascribed to the variation of only the mobility, the recombination, or the field dependence of generation. It is only when the changes of all three parameters are taken into account that the simulation matches the experimental J−V characteristics under all illumination conditions and for a wide range of voltages.