The optical properties of hydrogen-saturated Si clusters are studied theoretically through an approach that can treat consistently both small molecules and bulk crystals and fully includes electron-electron correlation. We find that optical spectra in the ground state cannot explain the observed luminescence of porous Si for the small particle sizes consistent with structural data. However, the same clusters in their excited state relax to locally distorted equilibrium configurations, giving rise to new transitions involving localized states that lower the emission threshold. These results allow to reconcile absorption and luminescence experiments with no need to invoke extrinsic effects.