Squaraines function as electron donors and are therefore combined with a model electron acceptor to create photovoltaic devices. The newly synthesized squaraine compounds were designed at the molecular level for use in small-molecule bulk-heterojunction photovoltaic systems. It was found that extending the alkyl chains at the molecular ends enhances the solubility in non-polar solvents, which allows them to be processed from the same solution as commonly used electron acceptors. Following this, thin films with appropriate architecture and processing were developed and assembled into solar cells. The most effective solar cells were further optimized to enhance the nanomorphology of the active layer, and thus improve overall device performance, which was accompanied by comprehensive Atomic force microscopy (AFM) and Grazing incidence small and wide-angle X-ray scattering (GISWAXS) characterization. This facilitates the understanding of how domain size, crystallinity, and preferred orientation influence device performance. The highest-performing solar cells were subjected to recombination analysis. This confirmed that the low hole mobility of the squaraine derivatives restricts device performance by creating a significant charge carrier imbalance that impedes transport. Furthermore, it was found that enhancing the crystallinity of the squaraine component within the bulk heterojunction leads to an increase in the short-circuit current of the solar cells, likely due to improved balance between charge carrier mobilities.