This paper presents a study of a small thermoelectric device used primarily as a heat pump and secondarily as an electricity generator when space heating and cooling are not required and incident solar radiation is sufficient. As a power generator, the thermoelectric device is integrated with an evacuated solar collector to utilize solar power. Performance of the thermoelectric device as a heat pump and as an electric generator is simulated using MATLAB/SIMULINK. The purpose of this study is to estimate the energy savings from using the thermoelectric device in its electricity generation mode. The potential of energy saving because of this electricity generation mode function, has been examined in three different cases. These cases represent the operation of the dual mode thermoelectric system in typical home, school and office buildings in the Mediterranean region. In addition, the effects of different parameters, such as the solar radiation and ambient conditions, on the device performance were investigated for both modes as well as parameters related to the device itself. Furthermore, hours of operation were estimated and the economic feasibility of the device was evaluated. Results of this study include performance curves of the thermoelectric device in both modes as well as the estimation of the payback period for Mediterranean regions. (C) 2015 Elsevier Ltd. All rights reserved.