The future's so bright, I gotta wear shades. And it's illuminated by brilliant, power-saving, unbreakable LED lights.

LED maker Cree (Nasdaq: CREE) showed us how possible that future is by reporting a blowout quarter Tuesday night. The stock has risen by 15% since the announcement. The business drivers are plentiful here, starting with the mainstream concern about environmental issues and a need to reduce power usage everywhere we look.

An LED lamp can do what incandescent bulbs do, only at tightly controlled color ranges, using very little power, and lasting for years on end. The only problems have been the cost of manufacturing and limited light output, but as these gizmos gain popularity, the manufacturing capacity has ramped up nicely, and research and development efforts don't seem too costly anymore.

It's a very small market today, served by just a handful of providers: Cree; Philips (NYSE: PHG), which just bought out Color Kinetics; and tiny upstart Nexxus Lighting (Nasdaq: NEXS). General Electric (NYSE: GE) has a small range of LED lights on offer, but theirs are mostly for use inside traffic lights and vending machines.

Demand is exploding right now, though. The burgeoning Chinese economy is clamoring for infrastructure upgrades that won't break the power grid, and the U.S. Congress just passed a bill to force incandescent lightbulbs out of municipal lampposts and the like by 2012. Ann Arbor, Mich., is replacing more than 1,000 downtown streetlights with light fixtures with Cree LED lights, in an early move toward a greener America.

Cree expects a global market for lightbulb replacements worth about $5 billion in revenues annually in the next eight years. Cree could parlay its head start out of the gate into a competitive advantage by building brand awareness and mindshare with consumers and corporate buyers. Over the past year, the company brought in revenues of $423 million, versus just $75 million for Color Kinetics at last count.

That said, this isn't a slam-dunk victory yet. OLED designers like Universal Display (Nasdaq: PANL) have some tantalizing lighting designs up their sleeves, and sleeping giants like 3M (NYSE: MMM) and Eastman Kodak (NYSE: EK) are working on exotic solutions, such as quantum dots. But it's a very large market -- one that potentially includes every light fixture in the world -- so there's room for several suppliers here. Indeed, we'll need a bunch of them to keep the world lighted the way we like it.

Now, where did my sunglasses go?

Further Foolishness:

3M is a Motley Fool Inside Value recommendation, and Universal Display is a Rule Breaker. In a good way. Try out either Foolish investing service free for 30 days.

Fool contributor Anders Bylund is a Universal Display shareholder but holds no position in any of the other companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is your candle in the wind.