Once lit, a neon lamp has a negative resistance characteristic: increasing the current through the device increases the number of ions, thereby decreasing the resistance of the lamp and allowing even more current. (This behavior occurs between the points labeled A and B on the lamp's current vs. voltage graph.) Because of this characteristic, electrical circuitry external to the neon lamp must provide a means to limit current through the circuit or else the current will rapidly increase until the lamp is destroyed. For indicator-sized lamps, a resistor is conventionally used to limit the current. Larger neon sign sized lamps often use a specially constructed high voltage transformer or ballast to limit the available current, usually by introducing a large amount of leakage inductance in the secondary winding.
When the current through the lamp is lower than the current for the highest-current discharge path, the glow discharge may become unstable and not cover the entire surface of the electrodes. This may be a sign of aging of the indicator bulb, and is exploited in the decorative "flicker flame" neon lamps. However, while too low a current causes flickering, too high a current increases the wear of the electrodes by stimulating sputtering, which coats the internal surface of the lamp with metal and causes it to darken.
The flickering effect is caused by the differences of the ionization potential of the gas, which depends on spacing of the electrodes, temperature, ambient radiation, and the pressure of the gas. The potential needed to strike the discharge is higher than what is needed to sustain the discharge. When there is not enough current to ionize the entire volume of the gas around the electrodes, only partial ionization occurs and the glow forms around only part of the electrode surface. Convective currents make the glowing areas flow upwards, not unlike the discharge in a Jacob's ladder. A photoionization effect can also be observed here, as the electrode area covered with the discharge can be increased by shining light at the lamp.
Most small neon (indicator-sized) lamps, such as the common NE-2, break down at between 90 and 110 volts. This feature enables their use as very simple voltage regulators or overvoltage protection devices. In the 1960s General Electric (GE), Signalite, and other firms made special extra-stable neon lamps for electronic uses. They even devised digital logic circuits, binary memories, and frequency dividers using neon lamps. Such circuits appeared in electronic organs of the 1950s, as well as some instrumentation. At least some of these lamps had a glow concentrated into a small spot on the cathode, which made them unsuited to use as indicators. These were sometimes called "circuit-component" lamps, the other variety being indicators. A variant of the NE-2 type lamp, the NE-77, had three parallel wires (in a plane) instead of the usual two. It was also intended primarily to be a circuit component.
Small neon lamps are used as indicators in electronic equipment. Called "tuneons" in 1930s radio sets, they were fitted as tuning indicators, and would give a brighter glow as the station was tuned in correctly. Larger lamps are used in neon signage. Neon lamps, due to their low current consumption, are used as nightlights. Because of their comparatively fast response time, in the early development of television neon lamps were used as the light source in many mechanical-scan TV displays. They were also used for a variety of other purposes; since a neon lamp can act as a relaxation oscillator with an added resistor and capacitor, it can be used as a simple flashing lamp or audio oscillator. (See Pearson-Anson effect.) The use of neon lights in automobiles is becoming more common in today's growing custom car parts market. Neon lamps with several shaped electrodes were used as alphanumerical displays known as Nixie tubes. These have since been replaced by solid state devices. Novelty glow lamps with shaped electrodes (such as flowers and leaves), often coated with phosphors, have been made for artistic purposes. In some of these, the glow that surrounds an electrode is part of the design.
In AC-excited lamps, both electrodes produce light, but in a DC-excited lamp, only the negative electrode glows. Thus a neon lamp can be used to distinguish between AC and DC sources and to ascertain the polarity of DC sources.
Indicator-sized lamps can also be filled with argon, krypton, or xenon rather than neon, or mixed with it. While most operating characteristics remain similar, the lamps light with a bluish glow (including some ultraviolet) rather than neon's characteristic reddish-orange glow; the UV radiation then can be used to excite a phosphor coating of the inside of the bulb and provide a wide range of various colors, including white. A mixture of neon and krypton can be used for green glow.
Neon was discovered in 1898. In the first decade of the 1900s Georges Claude (1870–1960), a French chemist, observed the red glow that was produced when running an electric current through a neon-filled tube. He also discovered that argon emitted a blue glow. While neon lighting was used around 1930 in France for general illumination, it was no more energy-efficient than conventional incandescent lighting. Neon lighting came to be used primarily for eye-catching signs and advertisements.
In 1923, Georges Claude and his French company Claude Neon, introduced neon gas signs to the United States, by selling two to a Packard car dealership in Los Angeles. Earle C. Anthony purchased the two signs reading "Packard" for $1,250 apiece. Neon lighting quickly became a popular fixture in outdoor advertising. Visible even in daylight, people would stop and stare at the first neon signs for hours, dubbed "liquid fire."
In 1926 Jacques Risler received a French patent for the application of fluorescent coatings to neon light tubes. The main use of these lamps, which can be considered the first commercially successful fluorescents, was for advertising, not general illumination.