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The nanocomposites can either be nanoparticles or nanowires in the range of 2-80nm in diameter. The thermoelectric figure-of-merit (Z) is proportional to the Seebeck coefficient and the electrical conductivity, but inversely proportional to the thermal conductivity. Therefore, to maximize the Z the material should minimize electron scattering (maximize electrical conductivity) and maximize phonon scattering (minimize thermal conductivity). There are two ways to achieve this, one is that the nanoparticles and the host medium have similar bandgaps and the other is that the nanoparticle has a lower potential minimum than that of the host media. The nanocomposites are fabricated using existing nanoparticle techniques (ball-milling, vapor-liquid-solid condensation, etc.) and then the nanoparticles can be embedded by placing them in a liquid host and then cooling the composite.