The stability and reproducibility of the electric properties in n-type doped ZnO represent known bottlenecks towards potential thermoelectric applications. The degradation is promoted by the vanishing of the electronic defects on oxidation and irreversible exsolution of the phase impurities. This work proposes a microstructural mechanism showing that these processes take place mainly in the pores and highlighting the necessity for high densification of ZnO-based thermoelectrics to ensure more stable operation. The electrical performance was monitored at various temperatures, followed by a detailed microstructural analysis. The evolution of the electrical conductivity and Seebeck coefficient confirm that the degradation is related to a gradual decrease in the charge carrier concentration rather than to the effects suppressing their mobility. The results suggest that the donor exsolution may promote an increase or decrease of the power factor, guided by the self-optimization of the charge carrier concentration.