This web site:
http://www.greenpowerlaw.com/2009/05/california-solar-law-mandatory-warranties/ claims that the California requirement is "15% in ten years" (i.e., no more than 15% degradation) on the overall system (which includes inverters) and a 25-year warranty (not described) on the panels. This is not hard to meet today. However, way back in the 1970s...
Solar PV panels were built then in pretty much the same way as today. First, you make single- or poly-crystalline silicon (i.e., highly purified sand) with a hint of phosphorous as the semiconductor dopant; or sometimes amorphous silicon, or some of the less "environmentally friendly" thin film methods, including cadmium telluride. Assuming you're using silicon, you slice it up into thin "wafers" and add your wires for collecting the PV charge. These are quite fragile, so the next step is to encase the whole thing in glass and aluminum ... but you also need
something in there to hold it all together and waterproof it.
That "something" is basically a variant of clear silicone sealant.
The problem with standard silicone sealant is that if you set it out in the sun and leave it there for 20+ years, it turns yellow or brown, which blocks out a lot of the sun! The solar radiation (same as what gives you a tan, plus the light itself) gradually changes the composition of the silicone.
So they fiddled with the chemistry of the sealant, and now any properly built panel uses stuff that stays clear for 40+ years. But that's where the "degradation" really comes from. Polycrystalline silicon (which is probably the most common technology for the PV wafers) should last almost forever as there are no moving parts. The glass surface over it can become pitted (scattering the light somewhat), or of course can be destroyed by Oklahoma-style hail (or tornados or whatever), but it was the sealant that shortened the lifespan of early PV panels.
