The aim of this paper is to evaluate the overall life cycle environmental impact of an adiabatic compressed air energy storage (ACAES) system, which is designed to achieve the best match between the power production of a photovoltaic (PV) power plant and the power demand from the final user. The electrical energy demand of a small town, with a maximum power load of about 10 MW, is considered a case study. The ACAES system is designed with a compressor-rated power of about 10 MW and charging and discharging times of 10 and 24 h, respectively. Different sizes of the PV plant, ranging from 20 to 40 MWp, and two different solutions for the compressed air storage, an underground cavern, and a gas pipeline, are analyzed. The aim of this analysis is to compare the impacts on human health, ecosystem quality, climate change, and resource consumption of the PV power generation plant and the integrated PV-ACAES system with those of a reference scenario in which the end user demand is met entirely by the grid. The best results in terms of a reduction in environmental impact in comparison to the reference scenario are obtained for a small PV plant (20 MW) without the ACAES section, with reductions of about 85–95% depending on the category of impact. The integration of the ACAES system improves energy self-consumption but worsens the environmental impact, especially for air storage in gas pipelines. The best configuration in terms of environmental impact is based on a 30 MW PV plant integrated with an ACAES section using an underground cavern for air storage and allows for improvements in the energy self-consumption of between 38% and 61%, with a reduction in the environmental impact compared to the reference scenario of about 80–91% depending on the impact category.