Blackpool, with its circling gulls, forgotten chippies and dangerously cheap beer, is not the first place you'd expect to find a Joseph Kosuth masterpiece nestled next to an iconic Tracey Emin. This juxtaposition of the great and the gaudy is precisely the joy of 'Neon: The Charged Line', which opens this weekend at Grundy Art Gallery.

Coinciding with the Blackpool Illuminations, the exhibition charts the use of neon in fine art since the 1960s, while a parallel exhibition in the upstairs gallery shines a light on lost neon sign designs of the 1930s. Of these anonymous sketches, it's unclear how many made it to production. Either way, the surviving drawings, unique to Blackpool, are works of art in themselves. They capture neon's hazy glow with finely smudged chalk on night-black paper, providing a rare glimpse into the medium's origin.

Downstairs, an eerie green light from the contemporary works snaps visitors into the present. 'Neon is at once futurisitc and inherently retro,' curator Richard Parry says of the lightform's timeless quality. 'And there's something sci-fi about Blackpool that neon just works with.'

This 'Blackpool-style' of chirpy, seaside neons come courtesy of Evran Tekinoktay's psychedelic TWIZ (2015) and BAMBI (2014), in the largest room of the gallery – two of a handful of dazzling kinetic pieces included. Opposite, an enormous graphic work from David Batchelor requires some serious sunglasses, and casts a lurid green hue across the space. Painted glass tubes are delicately wrapped around a reclaimed cement mixer 'which reflects Blackpool's working class history', the curator explains.

Neon's darker side (if it has one) is seen in the 'Text/Language' room, which delves into neon's relationship with the written word. Here, Tracey Emin's I know I know I know pulstates in her classic, impassioned scrawl, while an entire, Kosuth-grey wall is filled with his bold, meta-sentiments that explore the relationship between word, sign and meaning.

These pieces – particularly Kosuth's seminal work Neon (1965) – probe the artistic qualities of the medium. It is a lightform created to illuminate only itself – light for light's sake. This makes it an ideal material for conceptual artists like Kosuth – but a tricky thing to curate. Parry has managed beautifully by turning all of the overhead gallery lights off, building partition walls and covering all the windows. This way, different colour neons mingle in the middle, and darkened corners are left as rare, contrasting moments of calm. In these, we pause to reconsider the Blackpool Illuminations, questioning whether they have a place in art history books as well as tourist brochures.