The municipality of Amsterdam is swiftly advancing its climate neutrality aspirations within the EU’s Climate Neutral Cities Mission. To accelerate this transition, the municipality has set the target to fully utilize suitable rooftop surfaces for solar panels by 2050. Yet, economic incentives prompt households to replace PV panels prematurely, leading to functional panels being discarded for low-value recycling. This study focuses on evaluating the environmental consequences of lifetime extension strategies at city scale, using Amsterdam as a case study. Employing an innovative prospective Life Cycle Assessment (LCA) approach, this research examines net environmental impact across multiple scenarios, derived from a General Morphological Analysis (GMA). The findings indicate that, despite rapid technological advancements, retaining older panels on buildings proves environmentally preferable to early disposal. Moreover, re-installing functionally disposed panels holds the potential to drive a significant reduction of 790 to 1910 million kilograms of CO2-equivalent emissions, or 126 to 327 million euros in shadow costs. To seize the opportunity for reuse, the municipality is advised to initiate pilot projects urgently and collaborate with European end-of-life management stakeholders. Future research is needed to incorporate the influence of novel recycling practices, emerging circular technologies, regional market shifts toward Europe, and the implications of resource independence. This study underscores the need for sustainable PV panel management strategies to accelerate Amsterdam’s climate-neutral journey.