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Large unit cell calculations of the properties of charged point defects in insulators largely neglect dielectric polarization of the crystal, because the periodically repeated cells are so small. Embedded quantum cluster calculations with shell-model crystals, representing a single defect in a large crystal, are able to represent the polarization more realistically. For such embedded quantum clusters, we evaluate the optical excitation energy for the nitrogen vacancy in charge state (+3): vN3+ in AlN. This is done with and without dielectric polarization of the embedding crystal. A discrepancy of a few per cent is found, when both ground and excited state orbitals are well-localized within the vacancy. We show that the discrepancy rises rapidly as the excited state becomes more diffuse. We conclude that an embedded cluster approach will be required for transitions that involve even somewhat diffuse states. The investigation is based on a new model for AlN that shows promise for quantitative accuracy.