Rather than burning stuff to make electricity, a handful of thermoelectric-technology companies are trying to tap waste heat as an energy source.

Phononic Devices yesterday said that it raised $10 million to further develop and commercialize its semiconductor material for converting heat into electricity and efficient cooling. Investors in the series B round were Venrock and Oak Investment Partners.

Phononic Devices&39' module which can be used to generate electricity from waste heat

The Raleigh, N.C.-based company is improving on technology originally developed at the University of Oklahoma that can be embedded in small chips. Initially, the company plans to make modules for refrigeration or cooling electronic equipment.

On Thursday, another thermoelectric company, Alphabet Energy, said it has received two contracts worth $1.48 million from the U.S. Air Force and Army. The San Francisco-based start-up, which licensed technology developed at Lawrence Berkeley National Laboratory, will develop prototype thermoelectric chips for mobile power generation products that run on waste heat.

Thermoelectric chips use materials that are relatively efficient at converting a difference in temperature into a flow of electricity. Similarly, they can also take electricity and remove heat. Cooling with solid-state devices has been done in small refrigerators for years.

The challenge for thermoelectric technologies is making semiconductor materials that are relatively inexpensive and efficient at the heat-to-power conversion. In addition to cooling and portable power, thermoelectric chips have been tried on cars where engine or exhaust heat is used to power electronics.

Phononic Devices received a $3 million grant from the Department of Energy ARPA-E program for funding research into clean-energy close to commercialization.