jats:titleAbstract</jats:title>jats:pPhosphonium‐based polythiophene conjugated polyelectrolytes (CPEs) with three different counterions (dodecylsulfate, octylsulfate and perfluorooctane sulfonate) are synthesized to determine how the nature of the counterion affects the thermal properties, the self‐assembly in thin films and the performance as the cathode interfacial layer in polymer solar cells (PSCs). The counterion has a significant effect on the thermal properties of the CPEs, affecting both their glass transition and crystalline behaviour. Grazing‐incidence wide‐angle X‐ray scattering studies also indicate that changing the nature of the counterion influences the microstructural organization in thin films (face‐on jats:italicversus</jats:italic> edge‐on orientation). The affinity of the CPEs with the underlying photoactive layer in PSCs is highly correlated with the counterion species. Finally, in addition to an increase of the power conversion efficiency of jats:italicca</jats:italic> 15% when using these CPEs as cathode interfacial layers in PSCs, a higher device stability is noted, compared to a reference device with a calcium interlayer. © 2020 Society of Industrial Chemistry</jats:p>