In general, I think covering a cage at night is good practice. Covering mimics retreating to a nest or to the heavily leaved part of a tree offering the bird protection and warmth for the night. In households where the cage is placed in a room where human activity continues past the bird’s bedtime, covering ensures the bird is not disturbed by the activity around it.
Cage covers should be made of a non-offensive colour to the bird and of a material that cannot be chewed into small fibers. How the cage is covered can vary with the bird’s preferences. A full cover is only recommended if enough light can still slightly penetrate the cover so that the bird is never in complete blackness. Leaving a three to four inch open space down the vertical front of the cage or horizontally around the bottom of the cage allows enough light for the bird and helps prevent a ‘night panic’.
Dr. Kerry Korber
Calgary Avian & Exotic Pet Clinic