We present comprehensive study of the UV-VIS energy conversion in Gd2O3:Er nanoparticles. Based on our previous research, it was shown that Gd2O3:Er nanoparticles are promising for energy applications due to alternative channel of UV-VIS conversion through the Gd3+def →Er3+ energy transfer. However, a number of important issues, such as the influence of the structural features of the matrix (defectiveness and nonequivalence of cation positions) as well as the concentration of the activator ion on the processes of excitation-relaxation, were poorly understood. In this work we established and explained the mechanisms and regularities of UV-VIS energy conversion in Gd2O3:Er with a wide range of Er3+ concentration (0,25-8%). It was shown that with an increase in the Er3+ ion concentration, the mechanism of Gd3+def →Er3+ energy transfer changes from dipole-quadrupole interaction to exchange interaction due to a decrease in the average donor-acceptor distance. The evolution of the temperature dependences of Er3+ luminescence revealed two structurally (C2 and S6 positions in cubic Gd2O3) and energetically non-equivalent donor Gd3+def ions. It was determined that the distortions in the local environment of Gd3+def ions lead to the transformation of the barrier for emission quenching from discrete to dispersed distribution. The final efficiency of a complex UV-VIS conversion process was obtained accounting a number of factors: role of different channels of Er3+ excitation; bimodal distribution of energy barrier for emission quenching and influence of phonon states on non-radiative losses. The results demonstrate new possibilities for improving the functional characteristics of Gd2O3 nanoparticles for energy conversion devices. As one of the possible practical applications of the results of work, we made and tested prototypes of Si/Gd2O3:Er cells with enhanced efficiency of photovoltaic energy conversion.