Abstract By developing a thermoelectric generator (TEG) model coupled with exhaust and cooling channels for an exhaust-based TEG (ETEG) system, the influence of the cooling type, coolant flow rate, length, number and location of bafflers, and flow arrangement are investigated. It is found that the net output power is generally higher with liquid cooling than air cooling. Since a very low velocity of liquid coolant is sufficient for cooling the TEG modules, the flow resistance is negligible, and inserting a baffler, increasing the baffler length or the flow velocity generally improves the performance. However, both the baffler length and flow velocity of air cooling need to be moderate. Placing one baffler in front of a TEG module is sufficient to guide the cooling flow. The performance is generally unaffected by the change of baffler location. By maintaining sufficient temperature difference for all the TEG modules, the counter-flow arrangement leads to higher output power than the co-flow arrangement. Although liquid cooling is more complicated, and extra cooling power may be needed to cool down the circulating coolant, the temperature increment of liquid coolant through cooling channel is insignificant for cooling 20 TEG modules producing about 250 W of power.