If you were an investor in Cree (Nasdaq: CREE), Veeco (Nasdaq: VECO), or Aixtron (Nasdaq: AIXG) last week, chances are you were smiling Friday.

The reason: We just learned that China can stop -- and will stop -- producing incandescent lightbulbs. Following in the footsteps of the 2007 U.S. Congress, which voted to outlaw the production of Thomas Edison's invention beginning next year, China's National Development and Reform Commission, has ordered a halt to the production of 100-watt incandescent bulbs effective Oct. 1 of next year. Two years later, 60-watt bulbs will be added to the verboten list, with a sliding scale of prohibited products to follow over the ensuing years.

The news sparked an immediate reaction on Wall Street, with shares of (LED lighting manufacturer), and Veeco and Aixtron (makers of the machines that make LEDs) all spiking 10% in value. More speculative lighting plays did even better. Perennial cash burner, but also LED parts maker, Rubicon Technologies (Nasdaq: RBCN) rocketed 18%. Soon-to-be-profitable "organic" LED maker Universal Display (Nasdaq: PANL) leapt 17%. And tiny SemiLEDs (Nasdaq: LEDS) leapt a stunning 31%.

Dim bulbs on Wall Street
So far, so good. This reaction's entirely logical. If America (population: 307 million) banning incandescent bulbs is good news for LED lighting companies, then China (population: America plus 1 billion) doing the same thing is downright fabulous.

That said, one facet of Friday's feeding frenzy doesn't make as much sense: The sell-off at General Electric (NYSE: GE). News that the electric lightbulb company's signature product is getting swept into the dustbin of history may sound bad for GE. But it really isn't.

For one thing, lighting isn't exactly the core of GE's business. As negative events go, this one was never going to be particularly scary for GE. What's more, this LED-evelopment hardly comes as a surprise. While China's edict may qualify as "news," the U.S. law that predated it is 4 years old -- and General Electric hasn't exactly been sitting on its hands in the years since.

To the contrary, last year GE told investors it fully expected to see LEDs become 75% of its lighting business. Gearing up to make this happen, this year, GE inked a deal with Cree to cooperate on the manufacture of LED bulbs. I fully expect to see GE take this development in stride, and proceed to profit from it. With the stock selling for just 12.5 times earnings today, I expect you can profit from it, too.

Looking for other chances to profit from legislative developments in energy policy? Read our new -- and free! -- report One Stock to Own Before Nat Gas Act 2011 Becomes Law.