Recently, there has been growing interest in transparent luminous materials that can harvest low-intensity lighting; these materials would be beneficial to use with building-integrated photovoltaic (BIPV) technologies. Luminescent solar concentrators (LSCs), specifically, require optically and chemically stable materials that are capable of high transparency and efficient photoluminescence under normal lighting conditions to convert the spectrum of the ambient light to a usable form. In this article, the potential use of binary rare-earth oxide (RE₂O₃) thin films from an engineering perspective for ambient light photoluminescence and their ability to be used as spectral conversion layers for next-generation LSC windows are presented. After high-temperature annealing, the rare-earth thin films (e.g., Y₂O₃, Yb₂O₃, Er₂O₃, and Nd₂O₃) deposited on glass and gadolinium gallium garnet (GGG) substrates showed significant visible and near-infrared emissions. In contrast to the more common forms of excitation known for high-power optical excitation of rare-earth-doped compounds, the use of fluorescent lighting represents an uncommon room light source that also uses a distinct method of material excitation. The primary mechanism for sensitizing samples is believed to be oxygen vacancy defect states, and thin films are likely to further boost optical absorption and emission efficiency. The observed optical behavior suggests that these thin films may serve as multifunctional photonic coatings for sustainable smart windows, potentially also providing fluorescent cooling. Their combination of ambient-light photoluminescence, optical transparency, and thin-film interference creates opportunities for structural color coatings, passive optical management, and spectral conversion layers for luminescent solar concentrators. Although device performance has not yet been validated at the device level, this study shows that annealed RE₂O₃ thin films may be good candidates for use in future ambient light-powered transparent multifunctional devices. Device prototypes such as LSC devices and properties, e.g., optical waveguiding capacity and photoluminescence quantum yield, will be investigated.