Hi guys!
I have been playing guitar for around 2 years, since 2009. I mostly play hard rock, heavy metal and thrash metal music, and I love those genres. I used to play Metallica for a long time, and these days I have started to look into different bands, to expand my abilities.

Anyway, onto the point. I used to play around for 3 hours, more or less, in the beginning. From the time I started, April 09, to now, I have gotten quite good in certain areas, such as alternate picking, legato, galloping riffs, arpeggios, etc, and these days, as I said, I am looking to play other bands and try other techniques like sweep picking, etc.

These days I rarely get time to practice due to other important things, such as school work. If I am lucky, I can put in around an hour on a good day. Keep in mind one thing more: before I used to practice everyday. Now it's playing every 2 or 3 days...

Can skills start to "degrade"?!
Yeah, but not to the extent you're thinking about. Also when you start practicing them it all comes right back to you.

You're shredding speed might decrease, but nothing major. It's like riding a bike.
Quote by Venice King
Beethoven ****ed Jimi Hendrix and I was born. I make my own music.
Only slightly. It's like having a rusty iron joint and slapping some WD-40 on it. A few cranks and it's fine.
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So what? I wasted like 5 minutes watching DaddyTwoFoot's avatar.

Metalheads are the worst thing that ever happened to metal.
not once you've learned them, but you can get rusty after not playing awhile

not playing as much as you used to PROBABLY won't make you worse at what you can already do, you may just need to work back up to the level you were at when you left off
Fender Highway One HSS Strat
Boss Drive Zone Dual Distortion Pedal
Dunlap Zakk Wylde Signature Wah
Boss Super Chorus
Boss DD-3 Delay
Marshall MG15MSII Micro Stack
Try your best to pick up your guitar every single day, even for just 10 minutes. If you skip for a few days, if might feel weird when you pick up the guitar again.
As the guys said, u might lose a bit of speed and accuracy but its all there lying dorment. Just remember playing guitar isn't a natural human movement It takes a bit of time to work out the kinks. Once you reunleash the beast its not long... most of the hard yards is already done and its already been learnt your muscle/brain impulses and ears just need to remember it