Let’s face facts- we’re energy hogs. Energy usage continues to rise at a rapid pace as people across the world live more modern and connected lives. And while new sources of supply- from shale gas to solar power- have taken some of the pressures off of that high demand, the truth is we’re still using electricity at an alarming rate. To that end, a variety of governments have been seeking solutions to the potential energy crisis and energy efficiency measures have become the topic du jour. A consumer’s look to do more with less, one of the biggest opportunities could lie within in commercial and residential lighting space. New technologies are the main culprit of energy use across the world, but they are also helping to reduce the amount of energy needed to light-up our planet. For investors, focusing on this need for energy efficiency could provide great long-term gains for a portfolio. A Bright FutureLighting our homes and business may hold the greatest potential for energy savings. Currently, lighting accounts for approximately 20% of U.S. electricity consumption. Lighting our residences account for up to 20% of total electricity use, while in commercial buildings it accounts for nearly 36%. Much that energy demand comes from variations of incandescent and gas-discharge lamps. These bulbs produce light via a filament that glows when electricity heats it. They're downright inefficient, with roughly 90% of the energy they consume given off as heat, rather than light. However, times are changing. Semiconductors called light emitting diodes or LED's are driving that change, and saving energy. Although created in the 1960s, new technologies in LEDs are moving the semiconductor from the TV remote to high-efficiency bulbs. To produce the same amount of light as 40 to 100 watt incandescent bulb, a comparable LED will only consume 3 to 13 watts of power, a significant savings. Not to mention, they produce little to no heat and have an average lifespan of 50,000 hours. The average traditional incandescent bulb only lasts about 1500 hours. The potential energy savings, bulb longevity as well as the shrinking costs for the LEDs themselves are helping set up a huge surge in adoption by government, commercial and residential consumers. Analysts at Navigant Research forecast that revenue from LED lamp sales will rise to $8.7 billion by 2021. That’s a growing at a compound annual growth rate (CAGR) of 23.2% from today’s numbers. Industrial icon General Electric (NYSE:GE) -whose founder invented the first light bulb- predicts that LEDs will make up between 70 and 80% of the general lighting market in that time frame.SEE: Emerging Markets' Environmental CommitmentShining A LightGiven the potential for LEDs and other solid state lamps (SSL) to dominate the lighting market over the next few decades, investors with longer termed timelines may want to consider the sector for a portfolio. The bulk of the market for LED bulbs is produced by a handful of manufacturers. Conglomerates like GE, Phillips (NYSE:PHG), Toshiba (OTCBB:TOSBF) and Panasonic (NYSE:PC) control more than half of LED sales. These large firms have many moving pieces and lighting is just one facet. However, investors do have a few –albeit more volatile- options with regards to pure players. The best could be industry standard-bearer CREE (NASDAQ:CREE). The company continues to be one of the top innovators across both the commercial and residential space and recently introduced a flood light that looks and lights like a traditional incandescent BR30 but uses 85% less energy. CREE continues drive costs lower as well. This new bulb is only $19.99. CREE shares aren’t the cheapest- at a forward P/E of 36- but its premium may be deserved as the industry leader. Diversified chip-maker Rambus (NASDAQ:RMBS) also makes an interesting LED choice. Just as with the regular semiconductor market, there are plenty of companies who manufacture the chips themselves, but only a handful that make the equipment to do so. Both Veeco Instruments (NASDAQ:VECO), and Aixtron (NASDAQ:AIXG) produce the equipment needed to make LED chips, while GT Advanced Technologies (NASDAQ:GTAT) also produces solar panel equipment along with various LED applications. The three firms should see long term growth in their LED portfolios as adoption of the technology and potential shortages will cause the need for more production equipment. The Bottom LineWhile new sources of supplies are helping curb the energy crisis, the truth is that we are still using more and more. That’s were energy efficiency measures could come in with LED technology being a perfect example of a technology that has a real impact on the amount of energy consumed. Over the long haul, the growth and adoption of LEDs is assured.

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