Deliberate compensation of crystalline silicon results in a decrease in the equilibrium carrier concentration, which leads to an increased carrier lifetime for the intrinsic recombination processes of Auger and radiative recombination. We present modeling which reveals that compensation also often leads to a significant increase in lifetime for recombination through defects via the Shockley-Read-Hall mechanism, a conclusion which is confirmed experimentally for the case of interstitial iron in p-type silicon. We show that the increased Shockley-Read-Hall lifetime can result from either an injection-level effect for deep levels, or from a Fermi-level effect for shallower levels. For cases where the defect exhibits no injection dependence of the carrier lifetime, compensation does not lead to an increased lifetime. Further modeling demonstrates that in certain cases, the lifetime increase can be expected to significantly outweigh the competing reductions in carrier mobilities and net doping, resulting in an improved short-circuit current, open-circuit voltage, and solar cell efficiency.