Final answer:
In devices with less than perfect efficiency, energy that is not used for work is lost as heat and becomes a degraded form of energy with higher entropy.
Step-by-step explanation:
When a device has less than perfect efficiency, the energy that is not used for the intended purpose is primarily lost as heat to the surroundings. This is in accordance with the principle of conservation of energy, which states that energy in an isolated system is neither created nor destroyed but can be transformed from one form to another. However, when energy is 'lost' as heat, it is not actually disappearing; it simply changes form and becomes less useful for doing work due to an increase in entropy. This 'waste heat' is a degraded form of energy because it becomes more spread out and less capable of performing work. Although energy quantity remains conserved, its quality or potential to do work diminishes.