If you need to signal whether track power is set to east or west, or whether a mainline or siding's power is set to make engines go forward or back up, or if you have a reversing loop and you want a signal to alert engineers to which way the forward/reverse Auxiliary Power toggle is switched, you'll do well to use either a bicolor LED signal or a mono-color one. I need polarity signals on reversing loops on one layout, to make sure I don't enter a reversing loop whose power is set to west from a mainline whose power is set to east. On my other layout I need polarity signals in two places on the mainline (whose blocks are one-way tracks) because of essential local train operations that require a short period of backing. The signals help warn engineers in case an operator forgets to reset the direction toggle for that block to the standard forward direction. Note: most blocks don't have their own direction toggles on most layouts. A direction control for each "cab" is the standard, whether dual cab control or multi-cab control. But one of my layouts has dozens of direction control toggles—as I've explained in another article.
Block signals need to be on the layout, regardless, but if you need "block-on" indicator lights on your panel that run off track power, use 10-volt grain-of-wheat lamps like those from All Electronics Corporation (8¢ + 45¢ = 53¢). Or use pairs of 5-volt grain-of-wheat lamps, from the same company, and connect them in series to each other and then in parallel to track power where one is on a panel and the other is on a signal or different panel. There's no reason that most N-scale locos will need to operate outside the 0-volt to 6-volt range, but a few times of accidentally turning up your throttle too high can burn out a 6-volt lamp connected to track power. The 14-volt Circuitron lamps will give very weak light when used with track power, so they're not right for this application.
My various MRCs throttles have highest throttle voltages of 10.6 volts to 15 volts, but I operate them in the 3.3- volt to 5.5-volt range, usually, and a double-loco consist gets up to only 7.7 volts. Make sure you test the 10-volt lamps' brightness before wiring them to your panel. If you run smaller-voltage bulbs off track power: add resistors (depends on track power voltage) where needed to all 1.5-volt to 9-volt lamps. For safety's sake, have lamps glow normally but not brightly at the highest throttle knob position you'll ever use: remember that the brighter the light, the shorter the bulb life.
Use the same landing gear clip method for signal housing creation as outlined above for turnout signals (figs. 1 and 2). Insert a Linrose bicolor red/green LED (99¢), an All Electronics yellow/green bicolor one (15¢), or an All Electronics mono-color one (8¢). I use the mono-color LEDs for warning lights to simply alert operators that "the next block has its power reversed." For 45¢ each (12¢ for the signal housing + 8¢ for the LED + 25¢ for a resistor), such a signal is worth the tiny investment in time and money. If you go with bicolor instead, it raises the price somewhere between 7¢ and 69¢. (The total price will be 52¢ to $1.36.) Wire the LEDs to track power (parallel, not series) but make sure you add a 1.3K-ohm, ¼-watt resistor to one of the lead wires so you don't burn out the LED. See fig. 5.
Incidentally, several companies, such as Western Rail Products, are putting out tiny LEDs that you might be able to carve signal housings for (since the LEDs' shapes are weird and hard to work with), or for pre-made N-scale LED signals, call N.J. International, Inc. at 1-516-433-8720 for a catalog. They even have signal parts to build with (sometimes).
Control Panel Lights
The first thing to realize is that packaging is most of the cost with some types of products—a case in point being when you compare buying one brass eyelet at a time at $1.10 each with buying 100 for $7.75 from SIG. That means that the perfect panel lamp holder for your control panel (SIG's SH-215 1/8" I.D. brass eyelet) costs less than 8¢ each. All 3mm or T-1 or 1/8" lamps and LEDs will fit them. Overlap one or more lead wire in the eyelet (for bulbs, not LEDs), or put 1/16" heat-shrink tubing around one lead, or both, to keep the LED/lamp in place.
So with general purpose 14-volt, 3mm clear lamps (which you can color with glass stain as needed) at under 44¢ each from Circuitron or for only 25¢ each from All Electronics Corporation, your panel lamps with holders will cost 52¢ or 33¢ each. (I recommend using the 6-volt winding off your 12-volt layout lighting transformer for panel lights going into eyelets—they get too hot and are too bright with 12 volts, but if you don't have a 6-volt winding use a 25-cent, 130-ohm resistor with 12 volts for the 30mA Circuitron bulb, or a 60-ohm resistor with 12 volts for the 65mA All Electronics bulb; ¼ watt resistor rating is good enough for either) With LEDs you'll spend from 40¢ to $1.07 each for panel lights. (If you're running more than 2 volts through an LED, use a resistor.) I recommend electronic supply store's 1/16" heat-shrink tubing or wire stripping debris tubes to insulate one lead wire from each LED from the other lead wire and the brass eyelet—short circuits are not a pretty thing! See fig. 6.
Use bicolor LEDs on panels for all turnouts that are hidden on your layout (8¢ + 99¢ = $1.07 for red/green or 8¢ + 15¢ = 23¢ for yellow/green if you're not a stickler for red or want to save cash); if they're not hidden, put the signal on the layout as outlined above. If the polarity signals need to be on the panel instead of the layout because of the logistics or hidden nature of the track involved, do that too (8¢ + 8¢ + 25¢ = 41¢).