A thermoelectric generator (TEG) converts a temperature difference directly into electricity; a heat engine uses heat to drive a mechanical cycle, then a generator converts that motion into electricity. A TEG can suit compact, small-output or hard-to-service applications where simplicity matters. A heat engine—such as an organic Rankine cycle (ORC) or Stirling system—may produce more electricity from heat in suitable conditions, but requires more equipment and integration. There is no universal winner: compare options at the same temperatures, heat input, electrical scale and operating schedule.
How do the two technologies turn heat into electricity?
Thermoelectric generators: direct conversion
A TEG produces electricity when its thermoelectric material has a hot side and a cooler side. The temperature gradient drives electrical output without first producing shaft work. The National Research Council describes the process as converting thermal energy from different temperature gradients between the hot and cold ends of a semiconductor into electric energy (National Research Council, 2015).
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The conversion module has no moving parts. That can simplify a small or remote installation, although the complete system still needs a way to bring heat to the module and carry heat away from its cold side.
Heat engines: a cycle followed by a generator
A heat engine uses a working fluid and a thermal cycle to produce mechanical work; a generator then converts that work into electricity. ORC systems use an organic working fluid, such as propane or toluene, rather than water. A Stirling engine is an external-heat engine: in a dish/engine solar-thermal system, heated fluid moves pistons and a crankshaft drives the generator, as the U.S. Department of Energy explains.
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That cycle involves more than the engine itself: heat exchangers, working-fluid equipment, generator hardware and, depending on design, pumps, controls and other balance-of-plant components.
Which is more efficient?
The historical figures available point toward heat engines in the cited contexts, but they are not a matched test of all TEGs against all heat engines. Efficiency depends on what is being measured—material, module or complete system—and on source and sink temperatures, thermal contact, heat exchangers, cycle design and parasitic loads.
| Technology and figure | What the figure means |
|---|---|
| TEG: typically below 4% thermal efficiency | National Research Council characterization in its 2015 report, drawing on cited literature; not a guarantee for every material or system. |
| ORC: maximum efficiency of 24% | U.S. Department of Energy technology assessment figure from 2015; not a controlled comparison with every TEG configuration. |
| Water-based Rankine cycle: more than 30% | The counterpart discussed in the same 2015 DOE assessment; the figure is not a universal operating result. |
Sources: National Research Council (2015) and U.S. Department of Energy (2015).
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How do costs and practical trade-offs compare?
The DOE’s 2015 assessment estimated ORC system costs at $2–$3 per watt and steam Rankine system costs at $1.10–$1.40 per watt. These are historical assessment estimates, not present-day installed quotes, and they do not establish a TEG-versus-ORC price comparison on a common system boundary (DOE assessment, 2015).
A TEG’s stationary conversion module can be useful where service access, noise or mechanical complexity is a concern. But low conversion efficiency may mean more heat-transfer area and careful thermal coupling are needed to obtain useful output. Heat-engine projects require mechanical and thermal integration, and their economics depend on project size, available operating hours, source temperature and installation conditions.
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Before selecting a system, assess these factors together:
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- Available thermal power and the desired net electrical output.
- Net efficiency after pumps, fans, controls and other parasitic loads.
- Installed cost on a consistent system boundary, annual operating hours, payback and levelized cost.
- Maintenance access, footprint, noise, service life and the operating environment.
A 2022 techno-economic comparison of TEG and ORC identifies measures including cost per watt, payback, net present value and levelized cost of energy; the right choice therefore depends on project economics as well as conversion efficiency (Energy for Sustainable Development, 2022).
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When does each technology make sense?
Consider a TEG for small, remote or service-constrained power
TEGs are worth considering for compact, distributed power or small waste-heat sources when a simple conversion module and reduced servicing needs are valuable. They are not automatically attractive just because heat is available: low efficiency can constrain output, and the hot and cold sides must be thermally managed. A DOE NETL project describing a 1 kW-class TEG program for high-grade automotive exhaust heat is a development use case, not proof of universal commercial suitability (NETL project page).
One historical vehicle demonstration in the National Research Council’s 2015 report generated approximately 450 W at 65 mph with exhaust at about 250°C, and more than 700 W with exhaust at about 500°C. Those are demonstration results under the reported conditions, not a current commercial-system guarantee (National Research Council, 2015).
Consider an ORC for a suitable waste-heat project
An ORC can be a candidate where a waste-heat source and project scale can support a cycle, heat exchangers and the associated balance of plant. The DOE discusses lower-boiling organic working fluids, including propane and toluene, for applications suited to them (DOE assessment, 2015). Whether it outperforms a TEG economically at a particular site requires matched-condition engineering and current vendor quotations.
Consider a Stirling engine for external-heat applications
Stirling engines are used in dish/engine concentrating solar-thermal systems. The DOE describes the conversion chain: heated fluid moves pistons to create mechanical power, and the crankshaft drives a generator (DOE dish/engine overview). This is a distinct heat-engine use case, rather than evidence that Stirling systems suit every waste-heat installation.
Quick Recap
How to make a fair site-specific comparison
- Define the heat source and sink. Record source temperature and stability, available thermal power, and the temperature of the destination for rejected heat.
- Set a common output and boundary. Compare systems sized for the same electrical demand and include the equipment needed to deliver usable power.
- Estimate net output. Account for pumps, fans, controls and other parasitic loads; do not compare module efficiency with whole-system efficiency.
- Model operating economics. Use expected annual operating hours and consistent installed-cost estimates to evaluate cost per watt, payback or levelized cost.
- Include operating constraints. Consider maintenance access, footprint, noise, service requirements, operating environment and expected life.
- Obtain current site-specific quotes. Historical assessment costs cannot substitute for current vendor pricing or an engineering assessment of the installation.
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