How can I cover an electrical panel that is in a very narrow space?

Hang a piece of art over it. Either a DIY piece or something you already have.

the easiest would be to fashion a 'wall hanging' to cover it. Choose a fabric that has a pattern on it that matches the look you are trying to achieve in the room, cut the size you require plus extra top, bottom and sides to finish the edges. I would sew, but if you're not a sewer, you can glue the edges. On the top and bottom, you want to fold over enough material to create a casing to insert either a small rod or in this case I would suggest using the stretchy wire curtain rods.

Consider decorating the panel itself but not placing anything in front of it. Sometimes things happen that may require quick access to shut down power. Seconds count.

I have a very large painting in he hallway of our beach place to cover the hideous placement of the electrical panel. You could shop for a piece of art or make your own with a canvas purchased a craft store.

You have an opportunity here to stretch your artistic wings. Constraints are where the magic happens.

hang a picture or piece of art work larger than the panel over it

Get a piece of canvas from a fabric store and draw some design that you like on it. make a hem in the top of it, put a small dowel through it, tie a piece of ribbon or some twine on each end and hang it up over the panel. If you are not real artistic, you can always stencil something on the canvas.