  We describe a unified numerical model which allows fast and accurate
simulation of nonlinear light propagation in nanoparticle composites, including
various effects such as group velocity dispersion, second- and third-order
nonlinearity, quasi-free-carrier formation and plasma contribution, exciton
dynamics, scattering and so on. The developed software package SOLPIC is made
available for the community. Using this model, we analyze and optimize
efficient generation of THz radiation by two-color pulses in ZnO/fused silica
composite, predicting an efficiency of 3\%. We compare the role of various
nonlinear effects contributing to the frequency conversion, and show that
optimum conditions of THz generation differ from those expected intuitively.
