In this manuscript, we have successfully enhanced the value of the power factor by optimizing the electrical conductivity and the Seebeck coefficient. We have reported a successful growth of Ag-GeO2 nanocomposite thin films using a simple thermal evaporation technique. A pellet which was composed of pure Ag and Ge elemental powders was evaporated on c-Si substrate using a single stage horizontal tube furnace. The pellet was placed in the central heating zone of horizontal tube furnace and evaporated at 1030 °C with 50–60 sccm oxygen constant flow rate for making five different samples (Ag-GeO2 thin films) on c-Si substrate. The optimization of electrical conductivity and the Seebeck coefficient was performed by growing five different samples using 6.5–8.5 inches source to substrate distances (SSD) with a step of 0.5 inches. Encouraging thermoelectric results were obtained at optimized source to substrate distance of 7.5 inches with significantly improved values for electrical conductivity, Seebeck coefficient and power factor 18.5 S/m, − 167 μV/K and 5.14 × 10–7 Wm−1 K−2, respectively. Furthermore, the influence of SSD on the structural, vibrational and morphological properties was also studied using XRD, Raman spectroscopy and scanning electron microscope. The reported thermoelectric results were justified with detailed arguments supported by relevant experimental data.