A significant portion of surface melt on the Greenland Ice Sheet (GrIS) is due to dark ice regions in the ablation zone, where solar absorption is influenced by the physical properties of the ice, light absorbing constituents (LACs), and the overlying crustal surface or melt ponds. Earth system models (ESMs) typically prescribe the albedo of ice surfaces as a constant value in the visible and near‐infrared spectral regions. This work advances ESM ice radiative transfer modeling by (a) incorporating a physically based radiative transfer model (SNow, ICe and Aerosol Radiation model Adding‐Doubling Version 4; SNICAR‐ADv4) into the Energy Exascale Earth System Model (E3SM), (b) determining spatially and temporally varying bare ice physical properties over the GrIS ablation zone from satellite observations to inform SNICAR‐ADv4, and (c) assessing the impacts on simulated GrIS albedo and surface mass balance associated with modeling of more realistic bare ice albedo. GrIS‐wide bare ice albedo in E3SMv2 is overestimated by ∼4% in the visible and ∼7% in the near‐infrared wavelengths compared to the Moderate Resolution Imaging Spectroradiometer. Our bare ice physical property retrieval method found that LACs, ice crustal surfaces, and melt ponds reduce visible albedo by 30% in the bare ice region of the GrIS ablation zone. The realistic bare ice albedo reduces surface mass balance by ∼145 Gt, or 0.4 mm of sea‐level equivalent between 2000 and 2021 compared to the default E3SM. This work highlights the importance of simulating bare ice albedo accurately and realistically to improve our ability to quantify changes in the GrIS surface mass and radiative energy budgets.