The photoelectric effect causes electrons to be emitted from a metal surface when hit by photons.  How could we use LEDs to demonstrate the effect? We use LEDs to describe the photoelectric effect, technically the photovoltaic effect, because LEDs are made of semiconductors, and they can be used as a light emitter, but also as a photosensor. When light shines on the semiconductor material in the LED, photons with sufficient energy can knock electrons loose from their atoms through the photovoltaic effect. These freed electrons can then move through the material and potentially recombine with holes (positively charged vacancies left behind when electrons are knocked loose) at the p-n junction of the LED, releasing energy in the form of light.

"The efficiency of electricity transferred has a direct and proportional relationship with the wavelength of the light that falls on the object"

 If we shine a light on the LEDs, there will be a current emitted from the receiver LED, which act as the photodiode. The certain wavelength of the LED will respond to the certain wavelength of the photodiode.