The surname Pannell comes from England where it has two quite separate origins.
1) In the 12th and 13th centuries, at a time when many people did not have a surname, Payn was a popular Christian name even though it was originally derived from the Latin word 'paganus' meaning 'heathen'! The 'ell' part, meaning 'little', was added to distinguish between father and son just as with Johnson and Davidson. There are today many related surnames like Paine, Pagan, Paynell and Pennall.
2) The other source refers to the occupation of making panels of some kind. This is similar to the derivation of names like Butcher and Baker. Although the panels could be of any material, it is most likely that they were wooden. These could have been used in better quality houses but we suspect that they were actually used in ships. In the 1999 UK Electoral Roll there are nearly 800 households with the name Pannell. These families are heavily concentrated in Southern England, particularly along the coast in the counties of Sussex, Hampshire, Essex and Devon. 40% of all Pannells live in these four counties and these are very places where most of the Medieval wooden ships were built.