Energy transfer is inefficient between trophic levels primarily because dead organisms and waste are recycled throughout the trophic levels. This means that not all energy is passed on; a significant amount is lost as heat and through metabolic processes, and only a portion of the energy from one trophic level is available to the next.
In ecosystems, energy decreases as you move up each trophic level due to these losses, as well as the fact that only a small fraction of energy consumed is converted into biomass.