China's ban on incandescent bulbs shows opportunities for investment in energy efficiency.

The legislation bans sales and imports of incandescent bulbs that use over 100W of energy and will come into place in October 2012, this 100W limit will then fall over time until incandescent bulbs are essentially phased out in 2016. The Guardian has produced a map showing incandescent light bulb phase-outs globally, which shows how other countries are committed to the change. The EU decided in 2008 to phase out incandescent light bulbs by 2012.

As Bloomberg reports, this has bolstered the share prices for LED manufacturing companies that sell in China, and notes a potential subsidy from the Chinese government to LED manufacturers. It is likely that the policy change will affect companies all along the supply chain for LEDs, including those involved in manufacture, distribution and sales. This investment opportunity, together with other forms of energy efficiency, has been highlighted by some fund managers as a theme for investment, as changes in policy and consumer preferences will likely lead to long term growth.