The Department of Energy hopes that within the next few years incandescent light bulbs and overhead fluorescents will hang in museums - not homes. Through multimillion dollar grants toward developing LED technology, the agency is promoting the energy-saving light bulbs as the up-and-coming lighting solution.

Now, Popular Mechanics offer a glimpse at some of the government-backed projects and how they could change the future of LEDs.

The University of Rochester is working with WhiteOptics to improve the output of individual light emitting diodes. Eric Tether, founder of WhiteOptics, says, "People are not used to seeing dots; they want to see uniform, well-distributed light." If the project is successful, consumers can look forward to more pixilated light from LED fixtures at an affordable cost.

GE is also working on LED output through color correction projects. Many consumers complain about the "icy white-blue" light of LEDs. Now, GE is developing new phosphors that can absorb and re-emit the light from LED bulbs, giving it warmer color tones.

Another promising project is underway at Philips Lumileds Lighting Company. Philips hopes to tackle heat issues by using excess temperatures to increase the lumen output of LED bulbs. They aim to create a bulb that can give off 130 lumens per watt, which would offer users unparalleled energy savings.

All of these projects could help LEDs reach their market potential; LEDs magazine predicts the LED lighting market will reach $1 billion before the U.S. ban on incandescent light bulbs takes effect.