'Light' as a concept is often associated with clarity of consciousness. Psychic light might refer to a number of things, but one of the most stereotypical is the experience when the proverbial light bulb turns on in your head.
If your psyche is full of light, then you are an 'enlightened' and 'illuminated' person - not only have you seen the light, but you are also able to share that experience with others to a degree.
Physical light has interesting attributes as well. The opposite of matter is anti-matter, but the opposite of physical light is also physical light. In this regard, psychic light as a concept defies duality and points to the unity of consciousness.
Light can also teach us about time. According to the theory of relativity in physics, time ticks more slowly for a faster moving object. For a ray of light everything (from the beginning to the end of the universe) is in the NOW.
For a psychic, the concept of psychic light is pretty much invaluable because it can be applied in many useful ways - especially when exploring the structure of your own consciousness.