When confessional lights began to appear in the 1920’s, most American churches had two kinds of confessionals: a free-standing wardrobe-like affair still common in many countries, or a built-in confessional with three doors. The former would have a single light to show that a priest was inside, since it was obvious when a penitent was kneeling by the window. The latter type usually had a light over each door. Those lights were often red or white, but the color was insignificant. The central door was always for the priest and his light showed that he was inside. The penitent’s section featured a kneeler which activated the light over that door when knelt upon.
Since the 1970’s, when traditional confessionals began to give way to “reconciliation rooms,” two indicators were needed since there was a single door. Most churches use a green light to signal “come in” and red light to indicate “in use.” Some have a light for “priest present” (often white rather than green) which stays on while confessions are being heard, and another light when a penitent is inside. In other words, every parish does it a little differently.