A combined energy method is proposed to investigate the flutter instability characteristics of weakly damped panels in the supersonic airflow. Based on the small damping assumption, the motion governing partial differential equation (PDE) of the panel aeroelastic system, is built by adopting the first-order piston theory and von Karman large deflection plate theory. Then by applying the Galerkin procedure, the PDE is discretized into a set of coupled ordinary differential equations, and the system reduced order model (ROM) with two degrees of freedom is obtained. Considering that the panel aeroelastic system is non-conservative in the physical nature, and assuming that the panel exhibits a single period oscillation on the flutter occurrence, the non-conservative energy balance principle is applied to the linearized ROM within one single oscillation period. The obtained result shows that the ROM modal coordinate amplitudes ratio is regulated by the modal damping coefficients ratio, though each modal damping coefficient is small. Furthermore, as the total damping dissipation energy can be eliminated due to its smallness, the He’s energy balance method is applied to the undamped ROM, therefore the critical non-dimensional dynamic pressure on the flutter instability occurrence, and the oscillation circular frequency amplitude relationship (linear and nonlinear form) are derived. In addition, the damping destabilization paradoxical influence on the system flutter instability is investigated. The accuracy and efficiency of the proposed method are validated by comparing the results with that obtained by using Routh Hurwitz criteria.