Step 1: Concept
Gravitational potential energy ($U$) is given by $mgh$.
Step 2: Meaning
The energy lost is the difference between the initial potential energy at 20 m and the final potential energy at 17 m.
Step 3: Analysis
Initial energy $E_i = mg(20)$. Final energy $E_f = mg(17)$.
Percentage loss $= \frac{E_i - E_f}{E_i} \times 100 = \frac{20 - 17}{20} \times 100 = \frac{3}{20} \times 100 = 15\%$.
Step 4: Conclusion
Hence, the percentage of energy lost is 15.
Final Answer: (C)