Abstract: Thermoelectric material is an environment-friendly function material, which can~convert energy between heat and electricity. And it holds extensive~application~potentiality in power generation and refrigeration. The traditional thermoelectric generator is a \pi -type structure, which requires the length of the thermoelectric legs to be equal. In some cases, the structure is not conducive to the optimal design of the thermoelectric generator. Intense thermal stress and even stress~concentration will be induced in the thermoelectric generator due to high-temperature working condition, leading to shortening its working life. In addition, since the operating temperature of the thermoelectric generator is higher than ambient temperature, part of the heat will inevitably be dissipated to the environment, which will affect the thermoelectric performance and mechanical performance of the thermoelectric generator. Therefore, the heat dissipation cannot be neglected when analyzing this kind of problem. For these phenomena, in this work, a novel collinear-type thermoelectric generator model is proposed considering the heat dissipation in the side surface. And the legs of the proposed thermoelectric model can be optimized independently. Then, based on the finite element method, performance of collinear thermoelectric generator considering the heat dissipation in the side surface is simulated. And the thermoelectric performance and mechanical performance under the Dirichlet boundary condition is analyzed. Simultaneously, the temperature field, electric potential field and stress field in the thermoelectric generator are obtained. The influence of various convective heat transfer coefficient on thermoelectric performance and mechanical performance of the thermoelectric generator is investigated. The results demonstrate that thermal convection can decrease the energy conversion efficiency of the thermoelectric generator. When the convective heat transfer coefficient reaches 100 W/(m^2\cdot\textcelsius), the efficiency is 0.047 9 which is 28% lower than the conversion efficiency of 0.066 7 in adiabatic state. Though heat loss from the side surface is increased due to heat convection, thermal stress is reduced. In practical application, proper design and improvement of the thermal insulation system should be carried out to improve the efficiency of energy conversion.