Thermoelectric modules (TEMs) enjoy their primary application of diverse cooling. However, they can be equally used for power generation. Thermoelectric generating modules and coolers are constructed in the same way due to the similarity of the physical processes occurring in them. The major difference between them lies in the assembly techniques employed and the composition of semiconductor material. To give a general outline of how thermoelectric generating modules and coolers are made up, the construction of a most typical cooler is described below.

TEMs utilize the effect that was discovered by Jean Peltier, a French watchmaker. The basic idea behind the Peltier effect is that whenever DC passes through the circuit of heterogeneous conductors, heat is either released or absorbed at the conductors' junctions, which depends on the current polarity. The amount of heat is proportional to the current that passes through conductors.

The basic TEM unit is a thermocouple, which consists of a p-type and n-type semiconductor elements, or pellets. Copper commutation tabs are used to interconnect pellets that are traditionally made of Bismuth Telluride-based alloy.

Thus, a typical TEM consists of thermocouples connected electrically in series and sandwiched between two Alumina ceramic plates. The number of thermocouples may vary greatly - from several elements to hundred of units. This allows to construct a TEM of a desirable cooling capacity ranging from fractions of Watts to hundreds of Watts.

When DC moves across TEM, it causes temperature differential between TEM sides. As a result, one TEM face, which is called cold, will be cooled while its opposite face, which is called hot, simultaneously is heated. If the heat generated on the TEM hot side is effectively dissipated into heat sinks and further into the surrounding environment, then the temperature on the TEM cold side will be much lower than that of the ambient by dozens of degrees. The TEM's cooling capacity is proportional to the current passing through it. TEM's cold side will consequently be heated and its hot side will be cooled once the TEM's polarity has been reversed.