The concept of high-grade energy compensation (HGEC) has been developed and derived based on thermodynamic analysis for better understanding and assessing the high-grade energy-use efficiency in a conventional subcritical vapour-compression heat-pump (VCHP) cycle. The derivation proposes a lower limit of HGEC ratio in a conventional subcritical VCHP cycle, meaning that the COP and/or EER that we get used to employing for assessing energy efficiency tend to overestimate the high-grade energy-use efficiency.