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The broad-based implementation of thermoelectric materials in converting heat to electricity hinges on the achievement of high conversion efficiency. Here we demonstrate a thermoelectric figure of merit  ZT  of 2.5 at 923 K by the cumulative integration of several performance-enhancing concepts in a single material system. Using non-equilibrium processing we show that hole-doped samples of PbTe can be heavily alloyed with SrTe well beyond its thermodynamic solubility limit of <1 mol%. The much higher levels of Sr alloyed into the PbTe matrix widen the bandgap and create convergence of the two valence bands of PbTe, greatly boosting the power factors with maximal values over 30 μW cm −1  K −2 . Exceeding the 5 mol% solubility limit leads to endotaxial SrTe nanostructures which produce extremely low lattice thermal conductivity of 0.5 W m −1  K −1  but preserve high hole mobilities because of the matrix/precipitate valence band alignment. The best composition is hole-doped PbTe–8%SrTe.

Non-equilibrium processing leads to record high thermoelectric figure of merit in PbTe–SrTe