We analyze the enhancement in optical absorption of an absorbing medium when spherical metal nanoparticles are embedded in it. Our analysis uses generalized Mie theory to calculate the absorbed optical power as a function of the distance from the metal nanoparticle. This analysis is used to evaluate the potential of enhancing optical absorption in thin-film solar cells by embedding spherical metal nanoparticles. We consider the trade-off between maximizing overall optical absorption and ensuring that a large fraction of the incident optical power is dissipated in the absorbing host medium rather than in the metal nanoparticle. We show that enhanced optical absorption results from strong scattering by the metal nanoparticle which locally enhances the optical electric fields. We also discuss the effect of a thin dielectric encapsulation of the metal nanoparticles. ©2010 Optical Society of America.