When an electric field is applied to a metal or semiconductor, the electronic structure of the material changes. The electrons (and other charged particles) will react to the electric field, by repositioning themselves within the material. Electrons in metals can relatively easily move around and are available in abundance. They will move in such a manner that they try to cancel the external electric field. Since no metal is a perfect conductor, no metal will perfectly cancel the external electric field within the material. In semiconductors the electrons that are available will not be able to move around as easily as electrons in metals. This leads to a weaker response and weaker cancellation of the electric field. This has the effect that the electric field can penetrate deeper into a semiconductor than into a metal.
The optical reflectivity of a (semi-)conductor is based on the band structure of the material close to or at the surface of the material. For reflectivity to occur a photon has to have enough energy to overcome the bandgap of electrons at the Fermi surface. When the photon energy is smaller than the bandgap, the solid will be unable to absorb the energy of the photon by excitation of an electron to a higher energy. This means that the photon will not be re-emitted by the solid and thus not reflected. If the photon energy is large enough to excite an electron from the Fermi surface, the solid will re-emit the photon by decaying the electron back to the original energy. This is not exactly the same photon as the incident photon, as it has for example the opposite direction of the incident photon.
By applying an electric field to the material, the band structure of the solid changes. This change in band structure leads to a different bandgap, which in turn leads to a difference in optical reflectivity. The electric field, generally made by creating a potential difference, leads to an altered Hamiltonian. Using analytical methods available, such as the Tight Binding method, it can be calculated that this altered Hamiltonian leads to a different band structure.
The combination of electron repositioning and the change in band structure due to an external electric field is called the field effect. Since the electric field has more influence on semiconductors than on metals, semiconductors are easier to use to observe the electroreflectance effect.