Summary:

Thermoelectric startup Phononic Devices has landed a $10 million investment to work on its technology to convert heat into electricity, or vice versa. There’s a big market for thermoelectrics that are cheap and reliable enough.

Refrigeration

Thermoelectric devices — semiconductors that turn heat into electricity, or vice versa — could find a lot of applications in the real world, if they can get the technology right. A startup called Phononic Devices is giving it a shot, and this week, announced it has landed a $10 million Series B round from venture capital investors Venrock and Oak Investment Partners.

Phononic is devising high-efficiency systems for both thermoelectric cooling — using electricity to remove heat — and thermoelectric generation that turns waste heat into useful power. It raised $2 million in a previous funding round and landed a $3 million ARPA-E grant in November.

Phononic is aiming at what it describes as a $125 million market for thermoelectric devices, whether that’s in generation or cooling applications. The company is aiming first at cooling applications, an area where solid-state devices have been serving a role for some years.

Turning waste heat into power, on the other hand, is a much broader — but much more diffuse — market. Up to half the energy generated in the U.S. is lost to waste heat, according to ARPA-E Director (and UC Berkeley professor) Arun Majumdar, making it a big target for recycling.

But much of that waste heat is hard to capture. Big industrial waste heat systems generally require pretty high temperatures to do things like turn water into steam to drive turbines. Finding a cheap and reliable thermoelectric method to capture the lower-temperature waste heat could open the door to far more applications.

Several startups are working on it, including Applied Methodologies, which was seeking funding last year to work on thermoelectric generators to capture waste heat from servers and other IT equipment. Another is Alphabet Energy, which landed $1.48 million in research contracts from the U.S. Air Force and U.S. Army last week, on top of a seed round of $1 million from Claremont Creek Ventures and the CalCEF Clean Energy Angel Fund last year. Alphabet hopes to have commercial products in the field by 2012 delivering power for $1 per watt, about 50 times lower than the current generation of thermoelectric materials.

Much of the work underway on thermoelectrics is concentrated on more efficient materials. Tucson, Ariz.-based Tempronics landed $2.7 million from investors including Nth Power last year for its technology to improve thermoelectric efficiencies of different materials, and MC10 landed an ARPA-E grant in 2009 to work on silicon nanotubes for thermoelectric systems.

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