A lab at the University of Waterloo says it has developed the perfect replacement for the soon-to-be defunct incandescent bulb.

Canada's supply of incandescent bulbs has been gradually disappearing off store shelves for the past year.

The federal government banned 100 and 75 watt bulbs in January and by the end of 2014, the same will happen with 60 and 40 watt bulbs.

Current alternatives, such as compact fluorescent(CFL) bulbs, haven't been popular with many consumers, says Pavle Radovanovic.

"[CFL] bulbs are actually viewed as a transitionary device, in the sense that they are more efficient than incandescent light bulbs but at the same time produce a very unpleasant, or mostly unpleasant, hue that consumers just don't like. On top of it they contain mercury.

"LEDs would certainly be a more favourable choice, but they are also very expensive. They contain rare earth elements, in their converting part, to produce white light. They are certainly complex. People would like to have LEDs, but it's still cost-prohibitive," said Radovanovic on CBC's The Morning Edition on Tuesday.

Radovanovic's lab at the University of Waterloo has used chemically-modified nanoparticles to tune LED light to a specific hue, rather than using expensive rare-earth elements to offset the natural blue, red or green light emitted by LEDs.

The result is an easier-to-produce LED bulb that is pleasing to the eye and would be less expensive to consumers.

The team has produced prototypes and Radovanovic says they are currently negotiating with venture capital firms to fund a local start-up, with the hope of starting full-scale production in the next few years.

Listen to the full interview with the CBC's Craig Norris.