We have applied real time spectroellipsometry to measure the nucleation and growth of hydrogenated amorphous silicon (a-Si:H) films prepared by plasma-enhanced chemical vapor deposition from H 2 -diluted SiH 4 on crystalline Si (c-Si) substrates at 200 o C. For a H 2 -dilution ratio R=[H 2 ]/[SiH 4 ] of 10, optimum microstructural evolution is observed during the growth of 0.3 μm a-Si:H film, namely, smoothening during coalescence followed by long-term surface stability. At lower and higher R values, surface roughening in the thick film regime (d>20 nm) is larger, particularly for R=<20 due to crystallite development. Although dilution levels of 20=<R=<30 lead to microcrystallinity in thick films (0.3 μm), the structural evolution and optical properties in thin films (<20 nm) are characteristic of high quality a-Si:H. Thus, real time spectroellipsometry suggests that in the preparation of i-layers for solar cells, R~10 may be optimum for the bulk i-layer whereas a 10 to 20 nm layer with much larger R may be beneficial at the p/i-interface. These suggestions have been verified in p-i-n cells deposited on specular SnO 2 -coated glass substrates.