Graphene oxide was chemically tagged with thermoplastic polyurethane, chain extended using butanediol to obtain the varying molecular weight of the polymer. Graphene-tagged polyurethane was functionalized using propane sultone to introduce the polar sulphonate groups in the main chain. The chain extension, tagging of GO and functionalization have been verified through spectroscopic techniques such as NMR, FTIR, UV and gel permeation chromatography. Thermal stability and the nature of the interaction were explored through thermal measurements to understand the effect of GO and functionalization. Electrical conduction was improved by the chemical attachment of graphene with the polymer (5.08 × 10⁻⁷ S cm⁻¹), which further increases through functionalization and subsequent use of the additive (1.07 × 10⁻³ S cm⁻¹) and make them suitable for gel electrolyte, being in the range of semiconductors. Quantum dots of CdS and CdSe were prepared using a capping agent and their characteristic properties and dimensions were worked out for their suitability as active materials in a solar cell. The optical band gap of quantum dots and HOMO/LUMO band structure of functionalized polyurethanes were measured using UV-vis and cyclic voltammetry, and thereby, constructing the overall energy diagrams for a possible combination of materials. Conducting carbon has been incorporated in the gel electrolyte to modulate the conductivity, while the ZnSe layer has been inserted as a passivation layer between the active material and the gel electrolyte. Solar cell devices were fabricated using the suitable materials, through the suitable energy diagram, and found a significantly high power conversion efficiency of 1.71%. The reason behind the improved efficiency is understood from the greater light harvesting behaviour, higher level of conductivity and blocking capacity of the various layered structures to reduce the electron–hole pair recombination.