Using graded heterobarrier placed along an electron channel, phonons emitted in joule heating are recycled in-situ by increasing the entropy of phonon-absorbing electrons. The asymmetric electric potential distribution created by alloy grading separates the phonon absorption and emission regions, and emission in the larger effective mass region causes momentum relaxation with smaller electron kinetic energy loss. These lead to smaller overall phonon emission and simultaneous potential-gain and self-cooling effects. Larger potential is gained with lower current and higher optical phonon temperature. The self-consistent Monte Carlo simulations complying with the lateral momentum conservation combined with the entropy analysis are applied to GaAs:Al electron channel with graded heterobarrier, and under ideal lateral thermal isolation from surroundings, the phonon recycling efficiency reaches 25% of the reversible limit at 350 K, and increases with temperature. The lateral momentum contributes to the transmission across the barrier, so partially non-conserving lateral momentum electron scattering (rough interface) can improve the efficiency.