A novel two-way coupled Eulerian-Lagrangian hybrid approach was used to model nanofluid-based direct absorption solar collectors via a transient in-house code. By capturing the discrete nature of nanoparticles as well as motion and temperature slips between the carrier and dispersed phases, the proposed approach overcomes limitations of fully continuous models by coupling the fully-resolved local nanoparticle concentration with the nanofluid optical and thermal properties. In particular, it was established that the non-uniform distribution of nanoparticles results in the spatially non-uniform attenuation of solar radiation due to spatial variations in the nanofluid optical properties. Moreover, the volumetric absorption and temperature fields were computed and compared to the conventional fully continuous fields generated based on a homogeneous nanoparticle distribution assumption. The Reynolds number was found to have a strong effect on the local nanoparticle distribution in the flow of a nanofluid in a direct absorption solar collector, which greatly affects optical and thermal properties and performance of the nanofluid and collector. A critical flow Reynolds number was identified, after which the assumption of a homogenous particle distribution becomes inacceptable, and the homogeneous, fully-continuous modeling approach yields inaccurate results. In particular, the fully-continuous Eulerian modeling approach increasingly overestimates solar radiation extinction in vicinity of the channel top surface with an increase in Reynolds number, especially for Reynolds numbers >= 1. Effects on the coupled optical, thermal, and hydrodynamic interactions within the direct absorption solar collector due to the deviation of local nanoparticle distribution from the commonly-used homogeneous-nanoparticle-distribution assumption were investigated. Namely, new insights have been gained with regards to the impact of transverse nano particle migration, flow Reynolds number, mean nanoparticle concentration, and nanoparticle material type on the nanofluid temperature distribution, spectral radiation heat flux distribution, nanofluid optical properties, and collector optical and thermal performance metrics and losses. It was found that nanofluid optical properties in the visible radiation spectrum are highly dependent on the local nanoparticle concentration, which is in contrast to the infrared spectrum, where variations in the nanoparticle distribution have little effect on optical properties. The obtained results systematically identify the limitations of conventional direct absorption solar collector design tools and propose a new modeling approach that resolves those limitations as well as expands our physical understanding of the coupled optical, thermal, and hydrodynamics interactions within a volumetric absorption system.