An important green application of Rare Earth elements is their use in energy efficient lighting. Phosphors of Rare Earths are applied to the insides of the bulbs and generate light when energy is applied. These compact fluorescent lamps (CFL's) are replacing the standard incandescent light bulbs at a rapid rate.

Incandescence bulbs waste 95% of their energy and convert only 5% to actual light. Contrast this to the CFL which converts 25% of input energy to visible light via the Rare Earth phosphor coating. This efficiency results in much lower lamp temperatures, significantly longer life (estimated at 6 to 10 times as long), and less total energy consumed, directly reducing greenhouse gas emissions.

ENERGYSTAR reports that if every home in America replaced just one incandescent light bulb with a qualified CFL then in one year that action would save enough energy to light more than 3 million homes. This would prevent the release of greenhouse gas emissions equal to that of about 800,000 cars.

Countries around the globe are mandating the phase out of incandescent bulbs. Australia led the way by announcing all bulbs must be replaced with CFLs by 2010. The U.S. passed an energy bill that bans incandescent bulbs by 2014.

It is estimated that Rare Earth consumption in this application is growing about 15-20% per year meaning additional supply will be necessary to support this growth.