The U.S. Department of Energy estimates that over the course of a year LED lightbulbs could save enough power to illuminate more than 17 million American homes and also keep nearly 6 million metric tons of greenhouse-gas emissions from entering the environment.

That's why the DOE, through its Energy's Bright Tomorrow Lighting Prizes competition, or L Prize, is fast-tracking efforts to find replacements for two of the most widely used inefficient lightbulbs—the 60-watt incandescent lightbulb and the PAR 38 halogen lamp.

Philips Electronics recently became the first company to submit an LED bulb (shown) into the $10 million competition, which was established through the Energy Independence and Security Act of 2007. The winning bulbs will also be considered for federal purchasing agreements and promoted by DOE partners, including utility companies.

The DOE has set the bar high for the winning products. It's looking for LED lightbulbs that use less energy than not only incandescent and halogen bulbs but also compact fluorescent lightbulbs. (Check out our latest report on and ratings of CFLs, available to subscribers.) These LEDs must consume less than 10 watts, last more than 25,000 hours, and produce more than 900 lumens—a comparable output of a 60-watt incandescent lightbulb. What's more, the bulbs must be dimmable, and their color, light output, and light distribution must be similar to that of the bulbs their replacing. Independent laboratories will confirm that the bulbs meet the DOE's high standards through testing that's expected to take up to a year.

The competition encourages manufacturers to address LED drawbacks faster than the 20 years it's taken them to improve CFLs. Governments offering prizes for innovation isn't new. To help those lost at sea, the British government offered a prize in 1714 for coming up with a device to measure longitude, and in 1810 Napoleon offered a reward for finding a way to preserve food for soldiers. The chronometer and the canning process resulted.

You can find LEDs in stores now, and some are more efficient than CFLs, last even longer, turn on instantly, and don't contain mercury. But the quality of the white light LEDs typically produce isn't great, they don't produce enough light, and bulbs cost $20 to $50, with some soaring to $100.

The DOE has provided the following rough price guidelines for the winning LEDs: $30 (halogen replacement) and $22 (incandescent replacement) the first year the bulbs are on the market and $14 and $8, respectively, by the third year. These prices reflect rebates and other incentives to consumers. That's aggressive pricing, given that DOE is emphasizing a Made-in-the-U.S.A. model for the LEDs. For instance, 75 percent of the LED must be assembled in this country or packaged here, or the majority of the LED's die or chip must be U.S. made. One of the factors behind the price drop for CFLs is that most are made in China.

We'll continue to track the news surrounding the L Prize and keep you informed of the latest developments in LEDs.—Kimberly Janeway | e-mail | Twitter | Forums | Facebook

Essential reading: Find out how to choose CFLs, read "10 Questions for . . . Nadarajah Narendran, Ph.D., Lighting Researcher" for more news on advances in lighting technology, and see what European consumers think about the European Union's ban on some incandescent lightbulbs.