In bulk heterojunction polymer solar cells (BHJ-PSCs), poly(3,4-ethylenedioxythiophene) doped with poly(styrene sulfonate) (PEDOT:PSS) is the most commonly used hole selective interlayer (HSIL). However, its acidity, hygroscopic nature, and the use of indium tin oxide (ITO) etching can degrade the overall photovoltaic performance and the air-stability of BHJ-PSCs. Solvent engineering is considered as a facile approach to overcome these issues. In this work, we engineered the HSIL using ethanol (ET) treated PEDOT:PSS to simultaneously enhance the photovoltaic performance properties and air-stability of the fabricated devices. We systematically investigated the influence of ET on the microstructural, morphological, interfacial characteristics of modified HSIL and photovoltaic characteristics of BHJ-PSCs. Compared with the BHJ-PSC with pristine PEDOT:PSS, a significant enhancement of power conversion efficiency (~17%) was witnessed for the BHJ-PSC with PEDOT:PSS-ET (v/v, 1:0.5). Consequently, the BHJ-PSC with PEDOT:PSS-ET (v/v, 1:0.5) as HSIL exhibited remarkably improved air-stability.