A systematic study is presented on various effects of different environmental conditions on stability and degradation of small-molecule organic solar cells under continuous simulated solar radiation. Devices were fabricated based on heterojunctions with pentacene and copper phthalocyanine as donor, and [6,6]-phenyl C61 butyric acid methyl ester as acceptor materials. Seven different operating conditions were employed to investigate their degradation stability. Three simultaneous mechanisms were found to be largely responsible for device degradation: (i) photo-oxidation of active materials in the presence of light and oxygen that results in a drop of photocarrier generation and electrical transport properties of the cells, (ii) morphology instability with UV annealing reducing the charge transport within the devices and (iii) bubble formation in the vicinity of the electrodes with moisture absorption, affecting charge collection efficiency of the cells. Significant improvement in device stability was found by careful choice of operating conditions and proper encapsulation. Device lifetime enhanced by almost 100 times under UV filtered vacuum environment or with polydimethylsiloxane encapsulation as compared to a cell operated under ambient conditions without encapsulation.