Why LEDs have 10-20 x the efficiency of incandescent in traffic lights
One minor reason is that incandescent traffic light bulbs are not as efficient as "standard" incandescents. Incandescent traffic light bulbs (traffic signal lamps) are designed to withstand the vibration of trucks passing over potholes, and are designed to last usually 8,000 hours. Being turned on and off a lot is not much of a factor (explanation somewhere in my Incandescent Lamp File), but it might be a little significant if it has to be turned on and off nearly a million times in its design life expectancy. With the design compromised to keep working after 2 years in a traffic light, its efficiency is only about 60-65 percent of that of a "standard" incandescent of similar wattage. So an LED 10 times as efficient as this is only 6-6.5 times as efficient as a regular incandescent. More below why LEDs can easily achieve this in a traffic light.
The major reason is that traffic lights are colored. The red and green lenses block about 75 percent of the light! (Updated from 70% on July 13 2009.) In addition, LEDs normally specialize in producing a particular color of light. There is hardly such a thing as a practical white LED chip - the usual white LEDs have a fluorescent substance over a blue LED chip to convert some of the blue light to a broad spectral band from red to green. As of 2004, the red and green LEDs used in LED traffic signal units had about 2-2.5 times the energy efficiency of incandescent traffic signal lamps, before filtering by the colored lenses. (Yellow does not play a major role in energy savings since red and green are used so much more than yellow.)
Add to this the fact that LEDs can be made in custom-designed molded "bulbs" with tailored optical properties. This makes it a little easier to get light concentrated to where it needs to go and waste less power in producing light where one does not need as much.
Given all of this, one can see why a bunch of LEDs drawing 7-14 watts can do as good a job in a traffic light as th