BBP,
The goal is to minimize superheat and subcooling as low as we can, as it is not latent mode heat transfer to and from the refrigerant. A small amount of each is necessary (superheat to avoid flooding the compressor, subcooling to keep liquid line from burping) but excessive amounts of either rob from thermal efficiency. I have seen and heard of water source systems running less than 5 degF of each with no problems.
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