Since the 1960s, the photosynthetic productivity of leaves in the presence of regulated excitation dissipation has been assessed using the lake or puddle models, which assume that excitations travel either infinitely far or very locally regardless of the extent of quenching. Here, using a rigorous coarse-graining of a nanoscopic model of PSII light harvesting, we show that in fact excitation dissipation at specific pigment sites regulates photosynthetic productivity by modulating the excitation diffusion length across the thylakoid membrane. Variation in the excitation diffusion length alters the competition for excitation between reaction centers, which can be accounted for by a simple correction to the photochemical yield predicted by the lake and puddle models from chlorophyll fluorescence. Looking forward, the excitation diffusion length provides a useful conceptual tool for connecting modifications of excitation dissipation at the molecular scale with higher order effects on crop yield.