LED lighting can bring 1.8% per year decline in U.S. electricity consumption, the U.S. Department of Energy says. One or two LED light bulbs in each house in the U.S. would eliminate the need for an entire nuclear power plant. Demand is surging for LED bulbs.

There’s no question we’re on the verge of a boom in energy-saving LED lighting, with LED expected to dominate the market a few years from now. For investors, the question is this: who benefits?

This energy play has one stock as the clear winner in a huge trend. There is only name worth discussing: Cree (CREE). Just as the LED boom is in its infancy, the same can be said for CREE’s revenue and profit growth.

Cree has been around quite a while, as have LED technology and LED-based products.

Soaring demand, skyrocketing sales

Radical cost reductions and government regulations have fueled rapid growth in recent years.  China has banned conventional light bulbs, and it’s essentially the same situation in the U.S. and Europe.

Demand is huge for the energy-saving bulbs and Cree sales are soaring dramatically. Its fiscal year 2011 sales of $988 million ballooned to $1.16 billion in 2012, then jumped again to $1.38 billion, a 19% growth rate.

In this calendar year, Cree’s sales rose 4.3% to $391 million from in the third quarter over the second quarter. Unit sales volume in bulbs was far greater than that as Cree cut prices, pricing some bulbs below the magic retail mark of $10. Third quarter profits gained 8% $30.5 million from the second quarter.

Industry growth is accelerating

Moreover, LED sales are just beginning to boom in retail — and growth is going to be accelerating for many years. According to IHS, a market research firm, $547 million dollars’ worth of LED lamps (bulbs) will ship in 2013. This is just the beginning – IHS sees growth rocketing to $3 billion in lamp sales by  2020.

According to McKinsey & Co., the big year when LEDs will begin to dominate the market is 2015, just 14 months away. Cree’s Global Lighting Market Model predicts LEDs will hold 45% of the market in 2016 and slightly less than 70% by 2020.

There was a recent selloff in the shares due to the company missing Wall Street expectations — just 4.3% revenue growth and almost 8% profit growth quarter over quarter! This has created an opportunity for short-term and long-term investors. The yearly low is $29 and change; the high for the stock is $76, an incredible run. The stock is now selling for around $53 and is, to my mind, cheap.

Yes, the P/E is astronomical and the PEG is high, but this too provides a misreading of the stock. How many large, established companies grow in serious double digits, both revenues and profits?

Ignore the traders, short-termers and lemmings on Wall Street. Look at core fundamental demand and double-digit growth when considering Cree.